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All the Better to Eat You With – Court of Final Appeal gives SFC bigger teeth with third route of enforcement in Tiger Asia

15 May 2013

The Securities and Futures Commission ("SFC") commenced a series of test cases seeking to use section 213 of the Securities and Futures Ordinance ("SFO") as a third route of market misconduct enforcement. One of the most important of these test cases is SFC v Tiger Asia. In that case, the SFC accused Tiger Asia, a US-based hedge fund, of insider dealing. However, since the defendants are based in the US, the SFC could not commence criminal proceedings against the defendants in Hong Kong. Furthermore, bringing action through the MMT would be time consuming and would preclude the SFC from bringing criminal action against the defendants should they set foot in Hong Kong. The SFC tried instead to by-pass the whole dual enforcement regime by commencing proceedings against Tiger Asia under section 213 of the SFO. The Court of Final Appeal decision in the Tiger Asia case handed down on 10 May 2013 is a landmark decision which clarifies the enforcement options available to the SFC under the SFO.

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