Hong Kong's 'block trade king' pleads not guilty as Segantii insider trading trial begins

Hedge fund Segantii Capital Management, its founder and a former trader pleaded not guilty on Monday at ​the start of an insider trading trial at Hong ‌Kong's District Court.

The trial, involving what was once one of Asia's largest hedge funds, is being closely watched as a test of a crackdown ​on insider dealing amid surging share sale activity.

The Hong ​Kong Securities and Futures Commission in 2024 started criminal ⁠proceedings against Segantii, its founder and Chief Investment Officer Simon ​Sadler and former trader Daniel La Rocca on suspicion of insider ​dealing in shares of fashion retailer Esprit (0330) ahead of a block trade in June 2017.

Prosecutors allege the defendants sold Esprit shares after receiving ​advance information about a planned block sale. Bank of America's ​Merrill Lynch unit arranged the deal at the instruction of client Lone ‌Pine ⁠Capital.

Tony Psarianos, a former banker at Bank of America, told Segantii's La Rocca about a potential deal involving 190 million Esprit shares "before the market opened on the previous day of the ​block trade", a ​court document showed.

Psarianos ⁠will be in Hong Kong and testify on May 11 and 12, prosecutors said on ​Monday.

Sadler, dubbed Asia's "block trade king", is the owner ​of Blackpool ⁠Football Club, his hometown soccer team. The case has led to the shutdown of Segantii's US$5 billion fund.

The trial is set to ⁠last 25 ​days until June 8. The maximum ​prison term a district court judge can impose is seven years.

Reuters

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