SFC Suspends Former Brokerage Employee for Unauthorized Trades

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has banned a former account manager at Kingsway Financial Services Group Limited from the industry for 12 months after he was convicted of conducting unauthorized trades in the accounts of three clients.

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The SFC’s investigation found that on several occasions between December 2013 and May 2015, Chan Wai Ling accepted order instructions from unauthorised individuals to trade in the accounts of his clients without obtaining written authorization from them.

In addition, Mr. Ling colluded with a third party to pretend that the order instructions originated from them when this was not the case. According to the SFC: “The investigation also found that Chan created deceptive telephone records to give the impression that the trade instructions originated from or were confirmed with the clients.”

The disciplinary action also found that Chan had placed discretionary trades on behalf of one of the clients without obtaining the proper authorization, while concealing the identities of those individuals who originally gave the relevant order instructions.

The violation occurred while he was a registered representative with the SFC under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities).

As such, Chan acted contrary to the internal policy of his company whilst his conduct also fell short of the standard set out in the Code of Conduct, casting doubt on his fitness to be licensed.

After taking into account all relevant circumstances, including that he had no previous disciplinary record, the SFC decided to ban Mr. Ling from re-entering the industry for one year from 26 July 2017 to 25 July 2018.

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