Banking

Ex-Morgan Stanley banker gets 7 years in jail for insider dealing

(Xinhua)
Updated: 2009-09-19 13:20

Former Morgan Stanley Asia Managing Director Du Jun was sentenced to seven years in jail and fined HK$23.3 million ($3 million) for insider dealing at a district court in Hong Kong on Friday.

Judge Andrew Chan also banned Du from being a director or manager of any listed company or dealing in securities or futures contracts for five years. The defendant was also ordered to shoulder the HK$0.93 million ($0.12 million) costs resulting from the probe by the Securities and Futures Commission (SFC).

"This sentence sends the strongest possible message that insider dealing is not tolerated in Hong Kong and those found guilty can expect lengthy terms of imprisonment," said Martin Wheatley, chief executive officer of the SFC.

Du was found guilty of nine counts of insider dealing and one count of procuring his wife to deal in shares of the Hong Kong- listed CITIC Resources on September 10.

The conviction of Du after a 38-day trial is the tenth the securities watchdog secured in the past 14 months. He is the sixth person jailed for insider dealing since the first conviction in insider dealing in July 2008.

Du was accused of buying a total of 26.7 million shares in the CITIC Resources, worth about HK$86 million ($11 million) in early 2007 while in possession of price sensitive information concerning a proposed deal.

Du sold 13 million of the shares after the deal was announced later on, reaping a profit of HK$33.4 million ($4.3 million), the court heard.

The case was closely watched by the local industry and the public. The SFC obtained an injunction order to freeze HK$46.5 million ($6 million) during the course of the investigation. The police also helped with the probe.