Multibank Exchange Group has scored a major victory against the Hong Kong financial regulator, the Securities and Futures Commission (SFC). The firm’s solicitors have managed to successfully force the regulator to cancel an alert that it issued against the firm in February. The Hong Kong Court gave a priority hearing the go-ahead, resulting in action by the Hong Kong regulator, which cancelled the alert 4 hours prior to the official hearing on the matter.
According to court documents seen by Finance Magnates, the Senior Counsel and Clyde & Co issued an urgent application before the High Court of Hong Kong. The solicitors of Multibank Exchange Group sought an order to restrain the SFC from putting the MultiBank Exchange Group on its alert list.
A Speedy Resolution
The Hong Kong Court gave the go-ahead for priority handling for the filing and listed the application to be heard in the High Court of Hong Kong at 3pm on Friday 2nd March 2018. After the action, on Friday morning, the SFC had an urgent meeting and backed away from the warning that the regulator had hastily issued.
Just 4 hours before the hearing, Clyde & Co received a telephone call from the SFC confirming that the SFC has terminated and removed the alert against MultiBank Exchange Group.
In his submissions to the court, the senior council of Multibank Exchange Group, Gerard McCoy SC, outlined: “The level of public condemnation, in this case, is on a completely different scale. The insinuation is that the company is somehow fraudulent or a scam. The news of such an Alert spreads within days to the investing public worldwide.”
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“At issue in the application is the procedural unfairness of the Securities and Futures Commission (“SFC”) when it placed the Applicant company on the “Alert List” of its website without communicating or notifying the Applicant in any shape or form before its placement on the “Alert List”, thereby denying it any opportunity to respond to whatever reasons the SFC may have for placing it on the List,” McCoy continued.
The case represents an unprecedented victory for MultiBank Exchange Group, as it is a very rare occurrence that any financial regulator worldwide takes such a swift action in rectifying a misunderstanding.
Speaking with Finance Magnates McCoy shared that in his 35 years of practice, he has never seen the SFC capitulate and back down. In fact he stated that it has never backed down before.
Group Chairman Statement
Commenting to Finance Magnates, the Chairman of Multibank Exchange Group, Naser Taher, said: “The Group and MEX are delighted that any negative inferences, arising from the SFC Alert, have been removed voluntarily by the SFC, and without the need for formal Court Orders. The Group and MEX emphasize and confirm that, in Hong Kong and in many jurisdictions across the world, the Group and MEX are compliant with regulatory regimes; the Group and MEX meet all regulatory requirements, including its licensing obligations; and the Group and MEX are fully compliant with the law.”
“The Group and MEX are professionally aggrieved that the SFC incorrectly placed them on the Alert List – without any notice, warning or opportunity to address the negative impact of the Alert.
The regulators have substantial powers and they should not misuse them. On the one hand, when a financial institution like MultiBank Exchange Group is harmed by the regulators misleading the public (as is the case is here), however, the financial institution has no recourse against the regulators because of the immunity they are granted by the governments,” Mr. Taher elaborated.