Tuesday, 27 September 2016
Last updated 6 min ago
Dec 13 2012 | 2:18pm ET
Hedge fund Tiger Asia Management pleaded guilty to criminal fraud charges, with founder Bill Hwang admitting that the fund engaged in insider-trading.
Tiger Asia, which has been in hot water for the trades in the stocks of two Chinese banks in Hong Kong for three years, agreed to forfeit more than $16 million to settle the criminal case—and made the payment yesterday. The firm, which in August began to return outside capital, was also sentenced to a year of probation.
In addition, the firm, Hwang and former head trader Raymond Park agreed to pay a combined $44 million to settle a U.S. Securities and Exchange Commission lawsuit. And today, Japanese regulators imposed their largest-ever market manipulation fine, ordering Tiger Asia to pay ¥67.71 million (US$815,000) for manipulating the market in shares of Yahoo Japan Corp.
The Japanese Securities and Exchange Surveillance Commission did clear Tiger Asia of insider-trading allegations in the case, which dates to 2009.
The SEC's lawsuit also alleged attempted market manipulation in shares of Chinese banks.
"Tiger Asia regrets the actions for which it accepts responsibility today and is grateful that this matter is now resolved and behind it in the United States," Hwang said. Tiger Asia is still fighting with the Hong Kong Securities and Futures Commission.
"On more than one occasion, Tiger Asia was entrusted with confidential, nonpublic information about companies, only to turn around and violate that trust by illegally trading millions of shares of the company's stock for huge profits," Paul Fishman, the U.S. Attorney in New Jersey, said. While Tiger Asia is a New York firm, Hwang lives in Tenafly, N.J., and entered the firm's guilty plea in Newark, N.J., federal court.
Hwang, a veteran of Julian Robertson's Tiger Management, set up Tiger Asia in 2001. The firm once managed as much as $5 billion and enjoyed annualized returns of 15.8% over its run, but had just $1.2 billion left when Hwang moved to turn the firm into a family office this summer. All outside capital has since been returned.
As part of the SEC deal, Tiger and Hwang agreed to forfeit $19 million in illegal profits plus interest. In addition, Tiger agreed to pay $16.6 million in penalties and Hwang $8.3 million, while Park will pay about $75,000 in forfeitures and penalties. Neither Hwang nor Park admitted to any wrongdoing.