Hong Kong’s SFC Fines, Bans Ex-CGIS Director For Insider Trading

The SFC wants to send a strong message to deter others from committing similar offenses, the regulator said.

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has banned a former licensed representative of China Galaxy International Securities (CGIS) from re-entering the industry for 30 months after he was convicted of conducting insider trading.

The disciplinary action follows the completion of criminal proceedings against Wang Can for insider dealing in the shares of Linmark Group Limited. In November 2014, Wang was a part of a team of CGIS preparing pre-engagement documentation for a potential client on acquiring Linmark.

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According to the complaint, the former executive asked his friend to open a securities account in September 2014 and using knowledge of nonpublic events he conducted personal trading in that account for at least nine months.

The defendants made $7,800 in profit through buying Linmark shares in his friend’s account and sold them two days after the company announced the proposed acquisition.

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A strong message to deter others

Wang worked for CGIS in Hong Kong from April 2013 to February 2016, when he was fired.

The violation occurred while he was a registered representative with SFC under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. Following the regulator’s decision, Wang is no longer licensed by the SFC nor registered with the Hong Kong Monetary Authority.

The SFC wants to send a strong message to deter others from committing similar offenses, the regulator said in today’s statement.

The watchdog further stated that Wang did not act in the best interests of his client when he conducted the unauthorized trades in the account without authorization, breaching the General Principal 2 and paragraph 7.1 of the Code of Conduct.

In addition, Wang acted contrary to the internal policy of CGIS, and his conduct also fell short of the standard set out in the Code of Conduct, casting doubt on his fitness to be licensed.

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