Hong Kong: section 300 of the Securities and Futures Ordinance

The Hong Kong Court of Final Appeal delivered judgment a couple of days ago in Securities and Futures Commission v Lee Kwok Wa and others [2018] HKCFA 45. A summary, in English, is available here.

The case concerned section 300 of the Securities and Futures Ordinance, Cap 571, which provides that "[a] person shall not, directly or indirectly, in a transaction involving securities, futures contracts or leveraged foreign exchange trading - (a) employ any device, scheme or artifice with intent to defraud or deceive; or (b) engage in any act, practice or course of business which is fraudulent or deceptive, or would operate as a fraud or deception".

The court held that "transaction" should be given a wide meaning, interpreted with reference to the purpose of section 300: to outlaw fraudulent conduct in securities transactions. It also held that the phrase "transaction involving securities" should be interpreted to include any dealings with a view to profit or avoidance of loss by the use of inside information (including, for example, the opening a securities account for the purpose of trading in securities).