1. The 1st Defendant, Young Bik Fung (“Betty”), was a solicitor in the employ of Slaughter and May (“SANDM”). The 1st Appellant, Lee Kwok Wa (“Eric”) was also a solicitor. He was Betty’s good friend and one-time lover. The 2nd Appellant, Lee Siu Ying Patsy (“Patsy”) and the 3rd Appellant, Lee Siu Fung Stella (“Stella”) are Eric’s sisters. 2. In April 2006, Betty was sent by her employer to Standard Chartered Bank (HK) Limited (“SCB”) on secondment to work on SCB’s intended takeover of Hsinchu International Bank Co Ltd (“Hsinchu Bank”). Hsinchu Bank was a company listed on the Taiwan Stock Exchange. In the course of such work, Betty learned of the impending takeover offer and the proposed price of the offer. This information was inside information. 3. In breach of her duties to her employer and SCB, Betty shared the inside information with Eric. They then arranged for Patsy to open a new securities account in Hong Kong with Tai Fook Securities Co Ltd (“Tai Fook”). Between 22 and 29 September 2016, Patsy placed purchase order for substantial shares in Hsinchu Bank via Tai Fook on the behalf of Betty, Eric and Stella using the purchase money contributed by all four of them. The instruction was relayed to an intermediary in Taiwan where the purchase of securities took place. On 29 September 2016, the takeover offer was announced. Betty and the appellants accepted the offer via Tai Fook, netting substantial profits. 4. The Securities and Futures Commission (“SFC”) commenced proceedings against Betty and the appellants in the Court of First Instance. The Court of First Instance found that they have misused the inside information in the dealings in Hsinchu Bank shares to obtain personal profits without the consent of SANDM and SCB. Accordingly, the Court of First Instance found that Betty, Eric and Patsy were culpable of employing fraudulent or deceptive devices in transactions involving securities under section 300 of the Securities and Futures Ordinance (“SFO”). While the Court of First Instance found that Stella did not contravene s 300, she was involved in the contravention and thus was liable to return her profits. 5. The appellants appealed to the Court of Appeal. One of the appellants’ arguments was that the word “transaction” under s 300 does not include conduct that occurred before the purchase and sale of securities, such as the opening of the securities account by Patsy in Hong Kong. Furthermore, it was argued that s 300 does not cover the purchase and sale of the Hsinchu Bank shares which took place outside Hong Kong. Therefore, the appellants could not have contravened s 300. 6. Additionally, the appellants argued that in order for their conduct to be regarded as occurring “in a transaction involving securities” for the purpose of s 300, the fraud must have been practised on the counterparty of either the purchase or the sale of the securities. It was argued that when the shares were purchased, the vendors of the Hsinchu Bank shares were not defrauded. Nor was there deception in the sale of the shares as the information about the takeover offer had ceased to be inside information by the time the sale took place. Therefore, there was no deception “in the transaction involving securities”. 7. The Court of Appeal rejected both arguments and affirmed the decision of the Court of First Instance. The appellants brought a further appeal to this Court. 8. The central questions in this appeal turn on the construction of s 300. Firstly, whether the word “transaction” in the context of s 300 of the SFO should be widely interpreted to include conduct which took place before the purchase and sale of securities. Secondly, whether any fraudulent or deceptive acts have occurred “in a transaction involving securities”. 9. The Court held that the word “transaction” should be interpreted by the context and purpose of s 300. S 300 is a general provision that outlaws fraudulent conduct in securities transactions. Adopting this approach, the word “transaction”, for the purpose of s 300, must be given a wide meaning. 10. In the present case, it includes a series of purchases and sales of Hsinchu Bank shares and the steps that were taken with a view to profit or avoid loss by misusing inside information, such as the opening of the securities account and the giving of instructions for the purpose of trading in securities. 11. Additionally, the Court held that in the present case, there was fraud on SCB “in a transaction involving securities” in respect of the appellants’ misuse of the inside information for personal gain. 12. Moreover, insider dealing is a species of fraud. It is a fraud on the public and not a victimless crime. Since it is undisputed that the appellants would have contravened s 291(5) of the SFO for inside dealing but for the fact that Hsinchu Bank shares were not listed in Hong Kong, their conduct amounted to a species of fraud which comes within s 300. Given that substantial activities constituting the complaint under s 300 occurred in Hong Kong, the appellants’ conduct is covered by s 300. CONCLUSION: 13. Accordingly, the appeal was unanimously dismissed.