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Bailey McCann, Opalesque New York:

After a three year long and expensive court battle, Pacific Sun Advisors and Andy Mantel have been cleared of any wrongdoing in Hong Kong. Mantel and his firm went before the Court of Final Appeal in its case with the Chinese Securities and Futures Commission (SFC), after the regulator alleged that the firm advertised its private fund inappropriately.

Mantel and Pacific Sun were first convicted of four charges of issuing advertisements to promote a collective investment scheme without the SFC's authorisation in China's High Court. The firm was ordered to pay a fine and Mantel was sentenced to four months in jail pending appeal. This ruling was a reversal of an earlier acquittal offered in the Eastern Magistracy.

In its case to the Court of Final Appeal, the SFC unsuccessfully argued that the professional investors’ exemption applied to the sale of securities only if the advertisement for such securities stated on its face that the securities were to be sold or were intended to be sold only to professional investors. In other words, if the advertisement did not contain such a statement, a person could not rely on the professional investors exemption by actually restricting the sale of securities to professional investors.

The appeal was brought on behalf of Pacific Sun and Andy Mantel by specialist securities lawyers, Timothy Loh Solicitors as solicitors and Laurence Li as counsel.

In the judgement the Court ......................

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