Bloomberg News

Former Cantor Executives Join China-Backed Investment Bank

October 10, 2011

(Updates with executive directors in sixth paragraph.)

Oct. 10 (Bloomberg) -- Four former Cantor Fitzgerald LP managing directors left the New York-based brokerage to become senior managers at a boutique investment bank owned by a China- backed, Hong Kong-listed venture.

Jason Boyer, Brett McGonegal, Bradford Ainslie and Uwe Parpart resigned in May and joined Reorient Financial Markets Ltd., which is backed by China Chengtong Holdings Group, one of three asset managers under China’s State-owned Assets Supervision and Administration Commission.

“It’s the marriage of a Chinese state-owned enterprise with a government mandate combined with a Western distribution platform,” McGonegal said in a telephone interview on Oct. 7, adding that the company aims to become a global investment bank.

Reorient Financial is owned by a venture between China Chengtong and Asia TeleMedia Ltd. It will be offered priority in advising on restructuring more than one hundred businesses managed by China Chengtong, Asia TeleMedia said in a statement to the Hong Kong stock exchange in May.

SASAC in August said the venture will “help advance the reform of state-owned companies.” About 20 to 40 such companies need to be restructured through mergers and acquisitions or initial share sale, Boyer said.

Johnson Ko

Executive directors of the Hong Kong-listed company that owns Reorient Financial include Johnson Ko, chairman of Varitronix International Ltd. and Angelina Kwan, formerly Asia Pacific chief operating officer for Cantor and a director at Hong Kong’s Securities and Futures Commission.

Zhang Binghua, general manager of CCT Asset Management and Communist Party Committee Deputy Secretary, and Ko’s daughter Samantha are also executive directors, according to an Aug. 9 Asia TeleMedia filing.

Boyer, McGonegal and Ainslie - formerly of Cantor’s Asian cash equities desk - and Parpart, Cantor’s former Asia chief economist and strategist, face legal action from the New York- based firm’s Europe and Hong Kong units.

Cantor alleges the four breached their employment agreement and fiduciary duty, according to a July 11 complaint filed in Hong Kong.

The four defendants also “solicited” and “induced” other Cantor employees to resign in order to start their competing business, Cantor said in a court document filed against Ainslie in a U.S. District Court in Colorado.

Hong Kong Judge A.T. Reyes on Oct. 6 issued an order halting the U.S. proceedings against Ainslie and McGonegal, saying Cantor is “not entitled to litigate in two places.”

A trial date has been set for Jan. 18 in Hong Kong.

“We acted in a professional manner and we leave it to the court to decide the outcome of the case,” Ainslie said in a telephone interview.

Cantor spokesman Robert Hubbell declined to comment on the legal proceedings and didn’t respond to an after-hours request for comment on the new venture.

The case is Cantor Fitzgerald Europe, Cantor Fitzgerald (Hong Kong) Capital Markets Ltd. and Jason Boyer, Bradford Ainslie, Brett McGonegal, Uwe Henke von Parpart, HCA1160/2011 in Hong Kong’s Court of First Instance.

--Editors: Douglas Wong, Mohammed Hadi

To contact the reporter on this story: Debra Mao in Hong Kong at dmao5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


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