Timothy Loh LLP Represents Citron Research in Precedent Setting Action Before the Market Misconduct Tribunal Arising from Activist Short Selling Report

Our Market Misconduct Tribunal Practice represented Andrew Left, the principal behind Citron Research, in an action instituted by the Securities and Futures Commission (“SFC”) before the Market Misconduct Tribunal (“MMT”) for a breach of section 271 of the Securities and Futures Ordinance (“SFO”) alleging a disclosure of false or misleading information. The proceedings arose as a result of an investment research report authored by Citron Research alleging that Evergande, a company listed on Hong Kong Exchanges and Clearing (“HKEx”), was fraudulent and insolvent.

The MMT proceedings were the first of their kind globally, in any major financial center, to take aim at an activist short seller who profited from a decline in prices following the issuance of a negative investment commentary. The case defined the standard of care required for investment commentary and what constitutes “false or misleading information” under the SFO, s. 271, confirming that information can take the form of an opinion..