SFC’s outgoing crime fighter Steward warns successor to beware of nice people
UPDATED : Friday, 21 August, 2015, 1:40am
Enoch Yiu firstname.lastname@example.org
The Securities and Futures Commission’s outgoing white collar crime fighter Mark Steward denied he has been an aggressive regulator but warned his successor to be beware of people who are nice to them.The SFC executive director, who leaves the commission next month after leading the SFC’s enforcement division for nine years, initiated a series of landmark enforcement and legal actions related to cases ranging from insider dealing and market manipulation to Lehman minibond and PCCW vote rigging, which earned him a reputation for being aggressive.
Meeting the media yesterday, he denied the tag, saying, “I think what I am doing is to make legislation work and I do what I think we should do. I do not think that is aggressive.”
Steward will take up a similar position with Britain’s Financial Conduct Authority after leaving the commission. The SFC has yet to name his successor but has said the recruitment process has begun.
Steward, a lawyer from Australia, came to Hong Kong after a stint as the deputy executive director of enforcement at the Australian Securities and Investment Commission.
He said he was moving for family reasons. “My daughter has been studying in the UK for a couple of years. My wife is from the UK. Nine years here is a long time and I think the change would allow a fresh eye for me, and the SFC also will have a fresh eye here,” he said.
As advice for his successor, he said: “Be careful of people who are nice to you because they may not really be so nice,” adding that as regulator, he maintained a distance with market participants to protect the independent nature of his responsibilities.
Steward’s years at the SFC saw several high-profile cases, including the jailing of former Morgan Stanley Asia managing director Du Jun over insider trading.
But Steward said what he would remember the most was the appeal court’s hearing on the SFC’s legal challenge that scuppered PCCW’s privatisation plan on grounds of alleged vote-rigging in 2009.
“The intense atmosphere at the media-packed courtroom is hard to forget,” he said.
Mark Steward – a look at the record of a white collar crime fighter in Hong Kong’s SFC
PUBLISHED : Thursday, 20 August, 2015, 1:01pm
The Securities and Futures Commission’s white collar crime fighter Mark Steward is busy with farewell meetings in the business sector and media during his last few weeks at the commission, and it is time to review the man and what he has done for the Hong Kong market.
The outgoing executive director who will leave the commission next month has made a series of landmark enforcement and legal actions that were aimed at bringing an orderly market to the city and to protect the interest of shareholders.
Steward will take up a similar position with Britain’s Financial Conduct Authority. The SFC has not yet named his successor but said the recruitment process has begun.
In announcing Steward’s resignation in June, SFC chief executive Ashley Alder said: “Mark has been instrumental in achieving great outcomes both for investors and for the market … making the fullest use of all our powers, remedies and sanctions.”
Steward is a lawyer from Australia who came to Hong Kong after working as deputy executive director of enforcement at the Australian Securities and Investment Commission. He has a law degree from Melbourne.
After he joined the SFC from September 2006, he used many of the new powers given to the SFC under the Securities and Futures Ordinance enacted in April 2003. The new law turned insider dealing into a crime and empowered the commission to seek court orders to compensate victims.
Here is a list of what Steward has done the past nine years:
2008 – First criminal conviction of insider dealing with dozen of insiders sentenced to jail. This included Du Jun, former Morgan Stanley Asia managing director, who in 2009 was sentenced to seven years in prison and fined HK$23.3 million for his HK$87 million insider dealing of shares of Citic Resources in 2007 based on non-public information. The SFC said on Tuesday that 294 investors have received HK$23.09 million from the case.
2009 – Launched a legal challenge that scuppered PCCW’s privatisation plan on grounds of alleged vote-rigging.
2009 – Negotiations with a group of 16 banks to repay retail investors most of the money they’d put into minibonds or other structured products linked to Lehman Brothers, which collapsed during the financial crisis. Most ended up getting back between 85 and 96 per cent of their initial investment.
2009 – The SFC started legal action against US hedge fund Tiger Asia and its senior executives Bill Hwang Sung-kook, Raymond Park and two others for insider trading and market manipulation ahead of share-placement announcements by Bank of China and China Construction Bank in 2008 and 2009. The Market Misconduct Tribunal in 2014 banned Hwang and Park to trade in the local market for four years and ordered them to pay HK$45 million to about 1,800 investors.
2009 – The SFC started legal action against Wong Kwong-yu, founder and former chairman of Gome Electrical Appliances and his wife Du Juan for misconduct in a 2008 share repurchase. The couple in 2014 agreed to pay HK$420.6 million to the company as compensation for misconduct.
2010 – The SFC suspended trading in sports fabric maker Hontex International after finding the company’s prospectus overstated turnover and pre-tax profits in the three years leading up to the listing in late 2009. The SFC successfully got the Hing Court to require the company to pay back HK$1 billion to its 7,700 investors, the first compensation ruling of that type.
2012 – The SFC started legal action against accounting firm EY to force it to hand over audit papers for the proposed listing of mainland company Standard Water on the local stock exchange in 2009. Standard Water withdrew its application in 2010 but the issue dragged on as EY refused to hand over the documents on the grounds that audit papers were state secrets in the mainland. The local court ruled in favour of the SFC in 2014 and EY gave up the appeal in July 2015, as it handed the papers to the SFC.
2013 – SFC applied to the High Court to wind up Hong Kong-listed China Metal Recycling, which an American short-seller accused of fraud earlier of the year. The High Court granted a winding up order in February 2015.
2014 – The SFC took legal action to seek HK$1.9 billion in claims from Citic and its former chairman Larry Yung Chi-kin and four senior executives for failing to disclose in a timely manner its finances after suffering a HK$15 billion forex trading loss in 2008. The Commission also took the company and the five people to the Market Misconduct Tribunal with a hearing due to start in November 2015.
2015 – The SFC announced it has been investigating the affairs of Hanergy Thin Film and banned the firm from trading on suspicion about its many connected transactions with its parent company.