Hong Kong SFC Bans China Tonghai Securities Broker for 20 Months for Executing 1,002 Unauthorised Trades
15th April 2022 | Hong Kong
The Hong Kong Securities & Futures Commission (SFC) has banned China Tonghai Securities broker Mr Poon Choi Yung from the industry for 20 months (April 2022 to December 2023) for breaches including executing 1,002 unauthorised trades from 6 client accounts between June 2019 to March 2020, and failing to take reasonable steps to establish 3 clients’ financial situations and investment experience during account opening. Hong Kong SFC: “The disciplinary action follows an SFC investigation, which found that between June 2019 and March 2020, Poon effected 1,002 transactions in six clients’ accounts without the clients’ specific authorisations for the trades and/or their written authorisations for him to effect the trades on a discretionary basis. The investigation also revealed that Poon failed to take reasonable steps to establish three clients’ financial situations and investment experience during account opening between May 2019 and February 2020. The SFC considers that Poon has also failed to act with due skill, care and diligence, and in the best interests of the clients when carrying on business activities.” In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including Poon’s cooperation in resolving the SFC’s concerns and his otherwise clean disciplinary record.”
“ Hong Kong SFC Bans China Tonghai Securities Broker for 20 Months for Executing 1002 Unauthorised Trades “
Hong Kong SFC Official Statement
The Securities and Futures Commission (SFC) has banned Mr Poon Choi Yung, a former licensed representative of China Tonghai Securities Limited, from re-entering the industry for 20 months from 12 April 2022 to 11 December 2023 for breaches of the SFC’s Code of Conduct (Notes 1 to 4).
The disciplinary action follows an SFC investigation, which found that between June 2019 and March 2020, Poon effected 1,002 transactions in six clients’ accounts without the clients’ specific authorisations for the trades and/or their written authorisations for him to effect the trades on a discretionary basis.
The investigation also revealed that Poon failed to take reasonable steps to establish three clients’ financial situations and investment experience during account opening between May 2019 and February 2020.
The SFC considers that Poon has also failed to act with due skill, care and diligence, and in the best interests of the clients when carrying on business activities.
In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including Poon’s cooperation in resolving the SFC’s concerns and his otherwise clean disciplinary record.
Notes:
- Poon was licensed under the Securities and Futures Ordinance (SFO) to carry on business in Type 1 (dealing in securities) and Type 2 (dealing futures contracts) regulated activities, and was accredited to China Tonghai Securities Limited from 23 April 2018 to 8 May 2020. Poon is currently not licensed by the SFC.
- General Principle 2 of the Code of Conduct for Persons Licensed by or Registered with the SFC (Code of Conduct) provides that a licensed person should act with due skill, care and diligence, in the best interests of clients and market integrity when conducting business activities.
- Paragraph 7.1(a) of the Code of Conduct provides that a licensed person should not effect a transaction for a client unless before the transaction is effected: (i) the client, or a person designated in writing by the client, has specifically authorised the transaction; or (ii) the client has authorised in writing the licensed person or any person employed by the licensed person to effect transactions for the client without the client’s specific authorisation.
- Paragraph 5.1(a) of the Code of Conduct provides that a licensed person should take all reasonable steps to establish the true and full identity of each client, and of each client’s financial situation, investment experience and investment objectives.
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