We have been involved in developing Expert evidence for many market misconduct cases having been appointed both by the Regulators and by Defending Parties.
Market misconduct is a collective term that includes offences like insider dealing, and price rigging or stock market manipulation such as creating a false or misleading price in the market.
We have also covered the disclosure of false or misleading information about securities or futures, the disclosure of information about prohibited transactions and a failure of a duty to act to prevent market misconduct. More recently, in Hong Kong, London and Singapore, attention has focused upon the failure to make prompt and proper disclosure of unpublished price sensitive information, especially by listed companies.
These activities require an increasing amount of cross-border experience. For instance, the speed of transfer of global information has heightened the potential for cross-market manipulation activities between the stock and the futures markets. The analyses of these requires Expert Witnesses to be market professionals who have served in several jurisdictions for lengthy periods.
In Hong Kong, market misconduct offences are usually investigated by the Securities and Futures Commission, while in Singapore they are investigated jointly by both the Monetary Authority and the Police Force.
It is best to appoint a Financial Expert as early as a need is recognised, either as an independent Expert or as an adviser. It gives time for the Expert to filter the evidence and review it. In some cases we have been able to shorten a case by closing particular routes of enquiry early in the proceedings – purely by illustrating standard market practice.
Some reviews on market misconduct and expert evidence follow:
HK SFC White Paper (2003) on fair markets: here
Summary of market misconduct by Charlton’s Law: here
HK SFC Guidelines on Insider Trading: here
Hong Kong Securities and Futures Ordinance: here
Singapore Supreme Court: Rules of Court 2006 Rev. Ed.
Singapore High Court Note to Experts: Note to Experts – Form 58
Other common law jurisdictions like Australia and the UK work to similar principles.