(Bloomberg) -- Hedge fund firm Segantii Capital Management and its founder Simon Sadler have pleaded not guilty to insider trading, setting the stage for a high-profile criminal trial in Hong Kong.
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Former trader Daniel La Rocca also pleaded not guilty at a packed Hong Kong District Court room on Thursday. The trial is set to start on May 4, 2026, and last 25 days.
Sadler and La Rocca face a maximum prison sentence of seven years if convicted. The court extended their bail terms.
Hong Kong’s securities watchdog in early May criminally charged Segantii, Sadler and La Rocca with insider dealing. The allegations led some banks and investors to reassess their business with Segantii, ending its 16-year run as one of the most consistent performers in Asia’s hedge fund industry.
Segantii has returned capital to investors, Bloomberg News reported earlier.
Sadler, 55, founded Segantii in Hong Kong in 2007 with just $26 million. At the peak in 2021, it oversaw $6.2 billion of assets, ranking it as one of the largest Asia-based hedge funds both by headcount and assets under management.
As of March, the firm had 151 employees in cities including Hong Kong, London, New York and Dubai, according to its website. Most have since left, with some finding new jobs as the company fended off the allegations.
Hong Kong’s Securities and Futures Commission accused the defendants of trading $1.14 million worth of shares of fashion retailer Esprit Holdings Ltd. before a June 2017 block trade, according to writs of summons dated March 25.
The case is likely to delve into the inner workings of block trades — in which investment banks arrange sales of big chunks of shares off exchanges by connecting sellers with buyers. Segantii was often the first port of call for bankers handling such transactions when they needed to gauge demand for upcoming deals.
The SFC recently issued new guidelines for so-called market sounding practices, in an effort to resolve problematic confidential information sharing before market-moving deals are announced.
Known as the “block trade king,” Sadler was chief investment officer at Segantii and managed the firm’s traders and analysts. He amassed a net worth of at least $360 million, according to the Bloomberg Billionaires Index, and owns Blackpool Football Club.
(Updates with bail terms in the third paragraph)
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