The Securities and Futures Commission (SFC) has banned and fined two former representatives of United Simsen Securities for failing to take reasonable steps to avoid conflicts of interest, and for trading ahead of and on the basis of non-public information about a pending share acquisition of a client.
Lam Chun Yin, a former officer of United Simsen, has been banned from re-entering the industry for 3 years. His subordinate, Yeung Chok Cheong, has also been banned from re-entering the industry, for 2 and a half years.
In addition, Lam and Yeung have been fined $111,000 and $51,830 respectively, which are the profits made by each of them from trading shares of Renhe Commercial Holdings on 31 December 2013.
Neither Lam Chun Yin and Yeung Chok Cheong are currently licensed by the SFC.
At the time, United Simsen was engaged by Pacific Plywood Holdings to provide corporate advisory services, Lam and Yeung were responsible for preparing a draft announcement for Pacific Plywood on its acquisition of 80 million Renhe shares on 31 December 2013.
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On the morning of 31 December 2013, Lam and Yeung purchased a total of 1.2 million and 392,000 Renhe shares respectively before Pacific Plywood placed its order with United Simsen to buy 80 million Renhe shares.
Lam and Yeung sold their Renhe shares during and shortly after Pacific Plywood’s acquisition of the Renhe shares.
According to the SFC, Lam’s and Yeung’s conduct fell short of the standard set out in the Code of Conduct and the Corporate Finance Adviser Code of Conduct and cast doubts upon their fitness to be licensed. The pair did not act with due skill, care and diligence in conducting their business activities.
The Securities and Futures Commission (SFC) which regulates Hong Kong’s securities and futures markets took into account all relevant circumstances, including that both Lam and Yeung had no previous disciplinary record prior to deciding on penalties.
Finance Magnates last reported on an SFC case in June when it announced that it had banned a former Wing Lung Bank employee over $25.8 million for fraud.