The Market Misconduct Tribunal of the Hong Kong Securities and Futures Commission ruled that the former company secretary of Danfeng and his mainland associates were guilty of insider trading

According to the Zhitong Finance APP, on July 17, the Hong Kong Securities and Futures Commission announced that the Market Misconduct Tribunal (the Tribunal) ruled that Asia Securities Co., Ltd. (formerly known as Danfeng Holdings Limited) (Danfeng) former company secretary Chen Siyi (female) and her mainland associate Wen Lide (male) had engaged in insider trading regarding Danfeng's shares, and ordered both to surrender illegal profits exceeding HKD 1 million. The Tribunal also disqualified Chen Siyi from participating in the management of Asia Securities Co., Ltd. or any other listed corporation in Hong Kong without court permission for four years and recommended that the Hong Kong Institute of Directors take disciplinary action against her. The insider information held by the two involved the sale of Danfeng's equity. On September 22, 2016, Danfeng, Tianan China Investment Co., Ltd. (Tianan), and Tianan's wholly-owned subsidiary Autobest Holdings Limited (Autobest) jointly announced that Autobest conditionally agreed to acquire 36.45% of Danfeng's entire issued share capital from Mr. Dai Xiaoming, then chairman, CEO, and executive director of Danfeng, at a price of HKD 2.75 per share. The Tribunal ruled that Chen Siyi had obtained insider information regarding the proposed acquisition of Dai's interests in Danfeng on September 2, 2016. She disclosed this information to Wen Lide, knowing or having reasonable grounds to believe that he would use it to trade Danfeng shares; and Wen Lide traded Danfeng shares while in possession of insider information. He purchased 1,250,000 shares of Danfeng through his securities account at Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. (Shenwan Hongyuan) between September 5 and 19, 2016, and bought 250,000 shares and 50,000 shares of Danfeng through his and his wife's securities accounts at Datang Investment (Securities) Limited on September 6 and September 12, 2016, respectively. The Tribunal also ruled that Chen Siyi had an interest in the trades of Danfeng shares made by Wen Lide through his Shenwan Hongyuan account. The Tribunal considered Chen Siyi's misconduct to be serious, as she served as the company secretary of Danfeng, and Dai Xiaoming entrusted the management role of Danfeng to Chen Siyi. She incited and facilitated Wen to buy Danfeng shares while possessing insider information and used other people's accounts to layer the acquisition of illegal profits to conceal the source of these profits. Based on its ruling, the Tribunal ordered Chen Siyi and Wen Lide to jointly and individually surrender HKD 794,347, and ordered Wen to surrender HKD 206,067, which were the profits obtained from insider trading of Danfeng shares. Both were also ordered to pay the legal fees and expenses incurred by the Hong Kong government and the Hong Kong Securities and Futures Commission. Other orders imposed by the Tribunal included a four-year cold shoulder order against Chen Siyi and Wen Lide, prohibiting them from trading any securities, futures contracts, leveraged foreign exchange contracts, or collective investment schemes in Hong Kong, as well as prohibiting Chen Siyi and Wen Lide from engaging in any conduct that constitutes market misconduct