La Rocca's JPMorgan Move Off Amid Insider Allegations

Key Takeaway

• Daniel La Rocca's move to JPMorgan as head of Asia-Pacific cash stocks trading canceled amid insider dealing allegations with Segantii Capital.
• Legal proceedings in Hong Kong for La Rocca and Segantii founder Simon Sadler involve insider dealing before a 2017 block trade.
• Segantii faces regulatory scrutiny, fined by South Korean regulators; firm's assets declined to $4.8 billion from $5.9 billion year earlier.

Insider Dealing Allegations

Daniel La Rocca, a former trader at Segantii Capital Management Ltd., and the firm's founder, Simon Sadler, are facing criminal proceedings in Hong Kong over alleged insider dealing. The Securities and Futures Commission (SFC) of Hong Kong has initiated these proceedings, marking a significant legal challenge for the individuals and the firm involved. The allegations pertain to insider dealing involving shares of a locally listed company before a 2017 block trade. Both Sadler and La Rocca appeared in court without making a plea, and the case has been adjourned to June 12. They were released on bail, with Sadler posting HK$1 million ($128,000) and La Rocca HK$500,000 ($64,000). Conditions of their bail include informing the SFC 24 hours before leaving Hong Kong and avoiding direct or indirect contact with any prosecution witnesses.

Career Implications for La Rocca

Following the allegations, Daniel La Rocca's planned move to JPMorgan Chase & Co. as head of Asia-Pacific cash stocks trading has been canceled. Initially reported by Bloomberg News in late February, the hiring was anticipated to mark a significant step in La Rocca's career. However, JPMorgan has informed hedge fund clients that La Rocca will not be joining the firm, citing personal reasons for the decision. Both JPMorgan and La Rocca have declined to comment on the matter. This development underscores the potential career ramifications of legal challenges in the financial industry.

Segantii Capital's Regulatory Troubles

Segantii Capital Management Ltd., once celebrated as a star hedge fund firm in Asia, has faced regulatory scrutiny beyond the current insider dealing allegations. In December, South Korean regulators fined Segantii 1.48 billion won ($1.08 million) for certain hedging trades. Despite these challenges, Segantii has been a significant player in the region, with founder Simon Sadler building the firm into a regional giant with offices in London, New York, and Dubai. As of March, the firm's annualized return since inception was more than twice that of a Eurekahedge index tracking performances of Asia-focused peers. However, the firm's assets declined to about $4.8 billion as of March, from nearly $5.9 billion a year earlier.