Hong Kong’s Securities and Futures Commission (SFC) has stripped the licenses of Richmond Asset Management and its owner, Graham Frank Bibby, and banned him from re-entering the industry for a period of 10 years after failing to conduct his business in a proper manner.
Upon investigation by the SFC, it was found that Richmond Asset Management and Bibby did not act in a fit and proper manner in that they procured investment funds from customers which were invested in assets which Bibby and his wife held substantial undisclosed interests.
Specifically, Richmond Asset Management and Bibby obtained around US$5 million from 36 clients to invest in a company and a plot of land in Phuket, Thailand known as Phuket Land, in which Bibby and his wife held substantial undisclosed interests.
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The client funds procured by Richmond Asset Management and Bibby were routed into three unauthorised funds (Optimizer Funds). As well as being investment advisors for the Optimizer Funds, Richmond Asset Management and Bibby also held management powers over the funds.
Monies Diverted into Optimizer Funds
Richmond Asset Management and Bibby directed monies invested in the Optimizer Funds into two other funds known as Asia Property Funds, in which Richmond Asset Management and Bibby were also advisers and investment managers.
In November 2007, the Asia Property Funds advanced a loan to The Fairway Holding Company, a Thailand-based company in which Bibby and his wife held a combined stake of 75 percent. The loan, which was essentially monies invested in the Asia Property Funds from the Optimizer Funds, were then used by Fairway to fund the purchase of the Phuket Land. Bibby also paid part of the purchase price of the Phuket Land.
The Optimizer Funds have been suspended since April 2010 and redemption requests from clients have not been fulfilled. The Optimizer Funds have been in limbo since suspension with the Asia Property Funds having become its major assets whilst the Phuket Land remains unsold and Fairway has defaulted on the loan owed to the Asia Property Funds.
The SFC concluded that Richmond Asset Management and Bibby failed to properly avoid and disclose potential conflicts of interest to its clients, abusing clients’ trust while demonstrating that they are unfit to be licensed to conduct regulated activities.