New York-based hedge fund and Tiger cub (Julian Robertson-seeded) Tiger Asia Management is in the eye-sights of the SEC.
The agency looks to be following up on an accusation by the Hong Kong securities regulator that the firm was insider trading, Bloomberg reports.
The SEC wants trading records and other documents from Hwang’s firm.
Though the Hong Kong Securities and Futures Commission (SFC) has so far accused Tiger Asia of two misdemeanours, here’s what the SFC isn’t happy about more recently, according to Bloomberg:
- Tiger Asia received advance notice and was invited to participate in placements of Bank of China Ltd. shares by UBS AG on Dec. 31, 2008, and by RBS on Jan. 13, 2009.
- The hedge-fund manager was given details of the placements under confidentiality agreements; he consented not to deal in the shares of Bank of China. Instead, he went on to short-sell 104 million Bank of China shares before the UBS placement, grossing HK$8.6 million of profit.
Tiger says they’re innocent and claims trading in Hong Kong remains unaffected – though the fund is down $1 billion since last year. It contracted 7.4% in the third quarter alone due to hapless bets against Chinese securities.
The fund told investors in an October letter that it believes the SEC probe is related to the two accusations of insider trading by SFC. Those alleged misdeed include,
- In August ’09, the SFC accused Tiger of insider trading and market manipulation over 256 million shares in China Construction Bank Corp. The SFC applied for a High Court injunction to freeze $3.85 million in Tiger assets.
- In April ’10 the SFC accused Tiger of insider trading over the short-selling of 104 million Bank of China shares. The SFC attempted to ban Tiger Asia from trading in Hong Kong, “the first time it appealed to a court for such a prohibition,” and asked the court to freeze $1.1 million in assets.
The hedge fund is one of many “Tiger cubs” – firms funded or “seeded” by Julian Robertson after he shuttered his own Tiger Management in 2000.