South Florida Arbitration & Litigation Lawyer Blog
In the Matter of Sung Kook Hwang
Recently, the Securities and Exchange Commission (the “Commission”) issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Sung Kook (Bill) Hwang. The Order finds that Hwang was the sole principal and portfolio manager for Tiger Asia Fund, L.P., and Tiger Asia Overseas Fund, Ltd. (the Funds), both private funds, and the managing member of Tiger Asia Management, LLC (TAM), an investment adviser registered with the Commission.
The Order further finds that on December 14, 2012, a final judgment was entered by consent against Hwang, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, in the civil action entitled SEC v. Tiger Asia Management, LLC, et al., 12 cv 07601 (DMC), in the United States District Court for the District of New Jersey.
The Order finds that the Commission’s Complaint in that action alleged that Hwang engaged in insider trading when TAM entered into wall crossing agreements during December 2008 and January 2009 for three private placements of Chinese bank stocks, subsequently violated the wall crossing agreements by short selling the stocks, and then covered the short positions with private placement shares purchased at a discount. The complaint further alleged that by trading after receiving the material nonpublic information concerning the private placements, Hwang breached a duty owed to the provider of the private placement information, the placement agents representing the sellers of the securities. The complaint also alleged that Hwang violated the Advisers Act by directing trades to be placed in certain Chinese bank stocks at month’s end in November and December 2008 and January and February 2009 in an attempt to manipulate the price of those stocks to increase assets under management, which in turn would increase management fees during those four months.
Based on the above, the Order bars Hwang from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization with the right to apply for reentry after five years. Hwang consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction.
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