Too short

20 October 2016 By Pete Sweeney Follow @petesweeneypro

Banning U.S. short-seller Andrew Left from Hong Kong’s stock market for five years, and threatening future criminal penalties, is harsh. This will hurt the market’s long-term health. The timing is also unfortunate, given concerns over rising mainland influence on the city.

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A Hong Kong tribunal banned Andrew Left, founder of U.S.-based short-seller Citron Research, for five years from the Hong Kong market in a landmark ruling against market manipulation in Asia's financial capital.

The Tribunal found Left culpable of market misconduct in connection with the publication of a research report on Hong Kong-listed Chinese property developer China Evergrande Group in June 2012, which knocked nearly 20 percent off the company's share price.

The tribunal also ordered Left to repay HK$1.6 million ($206,249) of profits made while shorting the stock.

- The tribunal granted a "cease and desist" order against Left, putting him on notice that if he breaks Hong Kong securities rules again the transgression will be treated as criminal.

Hong Kong's Securities and Futures Appeals Tribunal ruled in March that Moody's, the rating agency, breached the Securities and Futures Commission code of conduct by publishing a report in 2011. The publication raised corporate governance concerns over 49 Chinese companies, contributing to a fall in their Hong Kong share prices.

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The tribunal also ordered Left to repay HK$1.6 million ($206,249) of profits made while shorting the stock.

- The tribunal granted a "cease and desist" order against Left, putting him on notice that if he breaks Hong Kong securities rules again the transgression will be treated as criminal.

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