Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has banned Lawrence Lai, a former representative of UOB Kay Hian and UOB Kay Hian Futures (Hong Kong), collectively known as UOB Hong Kong, from re-entering the industry for 10 years after breaching its Code of Conduct.
The disciplinary action follows an SFC investigation into the trading of Nikkei Futures contracts in an account of UOB Hong Kong after a tsunami struck Japan on 11 March 2011.
Absence of SFC Licence
The SFC found that Lai falsely declared that he was not related to a holder of a client account and carried out discretionary trading in secret and without the appropriate authorisation.
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Lai also caused inaccurate and misleading account statements to be issued to a client and misled his employer that he was reducing the risk exposure of the client’s account when in fact he was substantially increasing the risk position.
Furthermore, it was found that Lai acted against the best interests of the client by trading without sufficient equity in the account to meet the margin requirement and margin call, which resulted in a trading loss of nearly $50 million.
The SFC concluded that Lai’s conduct fell short of the standards set out in the Code of Conduct which states that a licensed person should act honestly, fairly, in the best interests of its clients and the integrity of the market.
In its capacity as a regulatory body, the SFC provides overall protection for the investing public while minimising crime and misconduct in the markets.