Global Investigations Review - The law and practice of international investigations


Wednesday, 15 July 2020

US short seller loses appeal against Hong Kong market manipulation charge

The Court of Final Appeal of Hong Kong on 14 July rejected US short seller Andrew Left’s appeal against a finding that he committed market manipulation in 2012 by publishing an untrue report into a Chinese property company whose shares he was shorting. 

Hong Kong’s Securities and Futures Commission brought the civil complaint against Left in 2016, accusing the founder of financial research company Citron Research of recklessly disseminating false or misleading market information about Evergrande Property. 

The judgment upholds the tribunal’s original 2016 decision to ban Left from the Hong Kong financial market for five years and order him to pay $200,000 in disgorgement of ill-gotten profits.

SEB rules out appeal against $107 million anti-money laundering fine

Swedish bank Skandinaviska Enskilda Banken (SEB) has decided not to appeal against a fine by the country’s Financial Supervisory Authority (FSA) for failing to prevent illicit funds passing through its Baltic subsidiaries.

SEB said in a letter to its shareholders on 15 July that although it did not fully agree with the FSA’s June decision to fine it 1 billion Swedish kronor (US$107 million), it would prefer to focus on developing its anti-money laundering measures rather than lodge an appeal.

Money laundering in the Baltic region has been a significant issue in recent years. Danish bank Danske Bank revealed in 2018 that it had failed to check €200 billion in suspicious payments that flowed through its Estonian unit between 2007 and 2015.

US tech companies reject data-sharing agreement with Hong Kong regulator

Google, Microsoft and Amazon Web Services have refused to agree a data-sharing agreement with Hong Kong’s Securities and Futures Commission (SFC), citing concerns over China’s new national security law, according to the Financial Times.

Incoming Hong Kong financial regulations, separate from the recently imposed security law, will require these companies to share their customers’ banking records with the SFC without their customers’ knowledge. 

The regulator has reportedly been trying to reach a data-sharing agreement with the US companies before the regulations come into force. 

Lawyers with direct knowledge of the negotiations have said China’s recent national security law has made it “politically impossible” for the technology providers to agree the deal.

The law has already caused Facebook and WhatsApp to stop sharing user data with Hong Kong law enforcement agencies.

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