Hong Kong’s Eastern Magistrates’ Court has convicted Danny Fung Kwong Shing, a former account executive of Fulbright Securities, of fraud.
This comes five years after the Hong Kong Securities and Futures Commision (SFC) slammed a life-long industry ban on Kwong Shing.
The Court found Kwong Shing guilty of engaging in fraud or deception while carrying out securities transactions regulated under the country’s Securities and Futures Ordinance.
The SFC announced on Friday that the former Fulbright Securities executive has been remanded in custody while he awaits to be sentenced on October 27th.
Kwong Shing pleaded guilty to all 25 charges brought against him by the SFC, the Hong Kong securities regulator announced.
According to SFC, Kwong Shing during the hearing admitted that between 2 August 2013 and 16 December 2013 he used two of his client’s funds and securities without approval.
The regulator said the executive confessed to fraudulently effecting transactions in eight stocks with the two accounts, buying shares at high prices with one of the client’s fund and selling them at low prices to his friend's (and client's) accounts.
“These series of transactions resulted in a trading profit of $172,890 to his friend and a loss of $48,321 to his client,” the SFC said.
SFC's Life Ban
In 2017, the SFC fined Kwong Shing $542,071 and banned him for life from coming back to the country's trading industry.
The financial markets regulator had found that between January 2013 and 2014, he executed 772 unauthorized transactions in the account of his friend-cum-client at Fulbright Securities.
On top of that, the watchdog said he fabricated a telephone order recording to mislead Fulbright Securities into thinking the order was placed by the friend.
Furthermore, Kwong Shing impersonated another friend-cum-client through the telephone and placed orders on their account at another Enhanced Securities Limited.
As a result, SFC added, the executive secured profit for the second friend-cum-client while the first lost $2.6 million as a result of unauthorized transactions on his account.
Meanwhile, earlier this year, the SFC found several compliance lapses in several online brokerages operating in Hong Kong.
The regulator reviewed 50 licensed corporations offering online brokerage, distribution and advisory services in the country.
Furthermore, the SFC found that the brokers opened 96% of its accounts in the past year through non-face-to-face onboarding processes.
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