HK banker guilty of insider deal

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A Hong Kong court has convicted a former senior banker at Morgan Stanley of insider trading in a deal involving a large state-owned Chinese firm.

Du Jun was found guilty of buying $11m (£6.7m) of a Chinese investment firm's stock while advising the company on the purchase of an oil field in Kazakhstan.

He sold half the stock in Citic Resources for a $4.3m profit after the deal was announced.

The regulator said it was Hong Kong's largest insider trading case.

Citic Resources is an arm of China's largest state-owned investment company, Citic Group.

Mr Du was convicted of nine counts of insider trading and one of advising his wife to deal in shares of Citic Resources.

He is to be sentenced on Friday.

Mr Du was part of a Morgan Stanley team advising Citic Resources as the company was negotiating a $1bn deal to buy a Kazakh oil field as well as a stake in another oil field in north-eastern China.

Hong Kong's Securities and Futures Commission (SFC) said that on more than nine occasions in early 2007 Mr Du spent $11m to buy 26.7 million shares in Citic Resources.

He sold about half the stock for a profit of $4.3m in July 2007 after the Citic oil field deals were announced.

Mr Du pleaded not guilty to all the charges.

The head of the SFC called the conviction a major victory in the city's efforts to tackle market misconduct.