SFC Slammed By Former Deputy Chairman For Over-Reaction

by Mary Swire, for LawAndTax-News.com, Hong Kong

04 June 2004

Speaking at a hearing of the Hong Kong Securities and Futures Commission (SFC) Appeal Tribunal, former SFC deputy chairman, Ermanno Pascutto condemned the reulator for its over-reaction to what he called a "trivial offence" committed by an investment manager.

According to a South China Morning Post report, the SFC decided to revoke the license of Andy Mantel, managing director of Pacific Sun Investment Management, when it emerged that his firm had dipped below the $100,000 capital requirement level last October.

Mr Mantel claims that the infraction of the rules represents at worst a technical breach, as the financial documents submitted were for September, following which two years' worth of income came onto the company's books.

The SFC reportedly told the tribunal earlier this week that the harsh course of action was pursued because Mr Mantel had committed similar offences in the past, and had repeatedly been warned regarding his firm's capital levels.

However, Mr Pascutto slammed the SFC on Wednesday, telling the tribunal that:

"I have never in my 25 year career seen a revocation for such a trivial offence."

He went on to add that:

"I worked at the SFC for five years. There were lots of infractions. It's technical, it's not harming any one, you just fix it and it's done with. This is not in the grey area, it's so far behind the line it's shocking."

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