Champagne moment for Andy Mantel and Pacific Sun after court victory
Andy Mantel, together with lawyers and friends, were understood to have been in Lan Kwai Fong celebrating into the early hours on Saturday after winning a three-and-a-half-year battle with the Securities and Futures Commission that ended in the Court of Final Appeal on Friday.
Andy Mantel, together with lawyers and friends, were understood to have been in Lan Kwai Fong celebrating into the early hours on Saturday after winning a three-and-a-half-year battle with the Securities and Futures Commission that ended in the Court of Final Appeal on Friday.
The SFC first charged Mantel and Pacific Sun Advisors, of which he is the founder and chief executive, in 2013 with running advertisements to promote a collective investment scheme without its authorisation.
Mantel had argued that such authorisation was not required since the investment fund was only for professional rather than retail investors. The SFC maintained that it was required since the advertisement did not expressly state the fund was only for professional investors.
Professional investors are required to sign a declaration indicating that they have at least HK$8 million in liquid assets.
The SFC subsequently took the case to the High Court and it was sent back to the magistrate's court where Mantel and Pacific Sun were convicted on four charges of issuing advertisements to promote a collective investment scheme without the SFC's authorisation.
Pacific Sun was fined HK$20,000 and Mantel was sentenced to four weeks' imprisonment, suspended for 12 months. They were also charged with advertising the fund through unauthorised emails.
Mantel and Pacific Sun resumed their sparring with the SFC when in October last year they were given leave to appeal. The case was heard early this month.
The Court of Final Appeal judgment reads, "The [High Court] judge would appear simply to have accepted, although somewhat equivocally, the respondent's [SFC] construction of section 103(3)(k) [of the Securities and Futures Ordinance] on the basis that retail investors require protection against having their investment appetites whetted or in wasting their time in pursuing an interest in investing only to be told they are not eligible to do so."
The judgment further states: "The judge seems to have accepted the respondent's construction for prosecutorial ease and convenience, this is not a good reason for supporting the respondent's construction. On the contrary, it is a clear example of the vice referred to by Lord Millett of a court distorting or ignoring the plain meaning of the text of a statute in order to achieve a perceived desirable result."
A very relieved Mantel told : "I am glad that some three-and-half years later this is all over. Having this hanging over us has not been great for developing the business."
The SFC said in a statement on its website it would study the decision to determine whether there should be any proposal to amend section 103 of the Securities and Futures Ordinance.
It further noted that "the consequence of [Friday's] decision by the Court of Final Appeal is that the acquittal verdict at the Eastern Magistracy stands".
So million of dollars later, kudos to Magistrate Joseph To Ho-shing.
It was the third time the SFC had tried to ping Mantel and it wheeled out some big legal guns along the way, including Gary Plowman for its appeal to the High Court.
The SFC tried to deprive Mantel of his licence twice before, only to have it reinstated on both occasions on appeal. At one of these attempts, the SFC's deputy chairman Ermanno Pascutto, speaking on behalf of Mantel at the SFC Appeals Tribunal in 2004, said the SFC was guilty of "reprehensible behaviour" in revoking Mantel's licence. "I have never in my 25-year career seen a revocation for such a trivial offence."
