Prosecutors announce will track funds tied to three insider traders

By Linger Liu ,The China Post

TAIPEI, Taiwan — The Taipei District Prosecutors Office said yesterday they will begin efforts to track illegally gains funds after finding only small amounts of money in the bank accounts of three men accused of insider trading.

Senior assistant managers Qiao Ren-jie (喬仁傑), Hsu Xun-cheng (許訓誠) and fund manager Hsu hong-zheng (許弘政) are alleged to have worked with insiders in Prescope Technologies to manipulate the technology company’s share price.

The prosecutors said the three suspects may have already transferred their profits to different accounts, and will soon try to begin an investigation into where the assets are hidden.

The prosecutor said the three former mangers have around 10 accounts containing less than NT$100,000 in total.

The Financial Supervisory Commission (FSC) said it will cooperate with the investigation to track the alleged illegal profits in order to compensate investors’ losses.

The commission said previously that First Financial Holdings (第一金控) has been ordered to submit plans to compensate investors for losses related to stock manipulation by their three former fund managers.

More Financial Regulations Required Deputy director of the Securities and Futures Bureau, Wang Yung-hsin (王詠心), said that the FSC should work quickly to standardize its process of monitoring fund managers’ choices and investment behavior.

Wang said it is reasonable to request First Financial Holdings compensate investors for their losses, and warned that stock manipulation could have a negative impact on investor confidence. So far there have been no signs of significant sell-offs related to the funds in question, she added. The FSC is urging companies to develop an internal monitoring and penalty system to reduce the possibility of manipulation. It has invited securities investment trusts and consulting companies to develop a system to supervise investment professionals’ methods and choices.

Wang said that the FSC should also review purchases to look for irregular trade transactions, as well as increase the penalties for insider trading and other other illegal practices.