The Tiny Trades That Brought Down Segantii’s Giant Hedge Fund

It took just $1.14 million worth of well-timed trades to knock down one of Asia’s top hedge funds.

A Hong Kong court on Wednesday revealed how Simon Sadler’s Segantii Capital Management Ltd. allegedly used insider information to sell shares of an apparel retailer ahead of an impending block trade seven years ago.

The details underscore how accusations of wrongdoing can be devastating for investment firms, even if they involve trades that are tiny relative to assets under management. Segantii, which oversaw $4.77 billion at the end of April, decided last month to shutter its hedge fund and return all ...