The Securities and Futures Commission (SFC) of Hong Kong announced today that it has banned Fonia Kwok Lai Kwan from working in the industry for 12 months following a conviction from the Eastern Magistrates’ Court. The ban passed by the SFC is effective from August 25, 2018, until August 24, 2019.
On Friday the Eastern Magistrates’ Court convicted Kwok of operating an unlicensed asset management, Finamics Capital Management, of which she was the sole proprietor. The court found that between 2009 and 2015 Kwok offered and carried out asset management services without the firm having an SFC license.
Kwok herself was licensed to carry out Type 4 regulated activity (advising on securities) under the SFO, however, this was accredited to Altruist Financial Group Limited from September 12, 2006, to February 16, 2015, and not to Finamics.
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As a result, the Hong Kong securities regulator has banned her from operating within the industry for the next 12 months due to doubts of her character and reliability. The watchdog deemed she is not fit to be a licensed person.
The verdict against Kwok
According to the court statement, Kwok was responsible for recruiting the majority of Finamics’ clients. She also worked with Ho Man Chung Lawrence (Ho), who managed the investment portfolios for clients by trading securities and futures in their accounts. Ho was also not licensed with the SFC in any capacity.
The clients that Kwok recruited for Finamics agreed to pay the firm a monthly commission of up to 50% of the net profit generated in their investment portfolios. From these, the court found that nine clients who used Finamics’ services, invested about HK$7,501,387 ($955,564). These clients lost around HK$2,499,362 and Finamics, on the other hand, made a gain of around HK$946,514 off the commissions from trading.
On Friday last week, Kwok and Ho both pleaded guilty to the charges at the Eastern Magistracy. As a result, they were both convicted of the charges. Kwok was fined HK$5,000 and Ho was given a slightly lesser penalty of HK$4,000. The court has also ordered them to pay the investigation costs of the SFC.