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Alternative Market Briefing

Hedge fund manager Bill Hwang to pay $44m, forfeit $16.7m in gains for illegal trading in Chinese bank stocks

Thursday, December 13, 2012

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Sung Kook Bill Hwang
From Komfie Manalo, Opalesque Asia –Sung Kook "Bill" Hwang, the founder and portfolio manager of Tiger Asia Management, a $1.2bn New York-based hedge fund firm, and Tiger Asia Partners, pleaded guilty to one count of wire fraud and agreed to pay more than $60m in settlement against criminal and civil charges.

The U.S. Securities and Exchange Commission (SEC) accused Hwang and his firm with conducting a pair of trading schemes involving Chinese bank stocks and making $16.7m in illicit profits. He and his firms agreed to pay $44m to settle the SEC’s charges and to return the illicit gains after pleading guilty of the accusations.

The SEC alleges Hwang committed insider trading by short-selling three Chinese bank stocks based on confidential information he received in private placement offerings. Hwang and his advisory firms then covered the short positions with private placement shares purchased at a significant discount to the stocks’ market price. They separately attempted to manipulate the prices of publicly traded Chinese bank stocks in which Hwang’s hedge funds had substantial short positions by placing losing trades in an attempt to lower the price of the stocks and increase the value of the short positions. This enabled Hwang and Tiger Asia Management to illicitly collect higher management fees from investors.

The U.S. Attorney’s Office for the District of New Jersey also fil......................

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