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Simon Sadler, founder of hedge fund Segantii Capital Management, pleaded not guilty to insider dealing on Thursday in one of Hong Kong’s most high-profile financial criminal cases.
His former colleague Daniel La Rocca and the hedge fund itself also pleaded not guilty. They are charged with trading on inside information in relation to retailer Esprit’s securities in 2017. If convicted, Sadler and La Rocca could face a maximum prison sentence of seven years at Hong Kong’s district court.
Sadler, 55, who is from Blackpool in north-west England, founded Segantii in 2007 and built it into one of Asia’s most well-known hedge funds, with $6bn under management at its peak. He is the owner of Blackpool Football Club, which he bought in 2019.
The fund has started winding down operations and returning capital to investors after Hong Kong’s Securities and Futures Commission announced its criminal investigation in May.
Segantii was one of the most powerful participants in the market for block trades, a lucrative corner of finance in which banks arrange to offload large chunks of shares privately. Such sales can depress a company’s stock price.
The hedge fund was a prolific buyer of blocks and had built strong relationships with Wall Street’s biggest banks. But in 2022, the Financial Times reported that Bank of America and Citigroup had suspended equity trading with Segantii due to concerns about its bets on block sales.
Segantii has previously said it “intends to defend itself vigorously against the charge”.
https://www.ft.com/content/3c744a08-35b7-498c-829b-7ce524a2e8dc
