HONG KONG: Hong Kong's financial regulators, the Securities and Futures Commission, has banned former CLSA Asia-Pacific Markets investment banker Allen Lam from the industry for life following his conviction in July for insider trading.

The SFC's investigation found that in 2005, in his position at CLSA, Lam accessed confidential and price sensitive information about a proposed takeover by JCDecaux Pearl & Dean Ltd of the controlling interests in Media Partners International Holdings Inc (Media Partners). According to the investigators, Lam then tipped off Mr Ryan Fong Yen-hwung, a former portfolio fund manager at HSZ (Hong Kong) Ltd, before the public announcement was made.

Fong took advantage of the information and purchased Media Partners shares, which he then sold at a profit after the announcement was made to the public. The misconduct involved coded emails between Lam and Fong designed to cover up the wrongdoing and prevent detection.

"Lam's conduct violated the trust expected of him as a licensee. There is no place for licensees who misuse confidential information and enter into arrangements like this to deceive the market," said the SFC's Executive Director of Enforcement, Mr Mark Steward, adding, "The SFC expects licensees will safeguard confidential, price sensitive information, not exploit it."

CLSA Spokeswoman Mandy Ho said the Asian brokerage arm of Credit Agricole SA "co-operated with regulators throughout this matter" and has strict internal policies and controls in place.

Attempts to reach Lam on a mobile number he previously used were unsuccessful.

Hong Kong's securities watchdog has cracked down on insider trading this year, securing the Chinese city's first jail sentences for insider trading, including former Morgan Stanley banker Du Jun and former BNP Paribas Peregrine Capital Ltd banker Ma Hon-yeung.

Insider dealing now carries a maximum prison sentence of 10 years and fines of up to HK$10 million in Hong Kong. Before 2003, insider-trading charges were heard as civil cases at the Insider Dealing Tribunal, an agency under the city's Financial Secretary, with authority to impose fines.

China Daily/ Bloomberg News

(HK Edition 11/24/2009 page4)