Hong Kong's District Court has handed Yan Chee-yung, a former employee of Chong Hing Securities, a 36-month prison sentence and the city's securities regualtor has banned him from the industry for life.
He was found guilty of 18 counts of theft for misappropriating some HK$6.9 million ($889,000) of his clients’ money.
The city's Securities and Futures Commission (SFC) said Yan’s conduct demonstrated a serious lack of honesty and integrity and concluded he was guilty of misconduct. His actions called into question his fitness and properness to be licensed, the regulator added.
Between June 2006 and February this year, Yan had misrepresented to 18 clients of Chong Hing Securities and Chong Hing Bank that he could buy shares on their behalf at a price lower than the market price and/or promised them that he would buy back the shares at a guaranteed price.
He induced the clients to enter into private investment arrangements with him.
He also induced the clients to give him money to buy shares on their behalf and misappropriated it, using it for his own personal expenses, gambling and settling credit card debts.
Yan falsified transaction records to gain the clients’ trust.
On February 11, Chong Hing Securities informed the SFC that he had failed to report to duty. The firm also told the regulator that two of its clients had claimed Yan had private investment arrangements with them and failed to return the money he owed them.
He was fired the same day.
Yan had joined Chong Hing Securities in 1996 and had worked at a Kowloon branch of Chong Hing Bank since 2002.
In deciding the penalty, the SFC took into account that Yan’s misconduct was gravely dishonest and had lasted for more than seven years; he abused the trust which his clients placed in him and his actions resulted in losses to them; he admitted his misconduct during the investigation; and he had an otherwise clean disciplinary record.
Yan was licensed to carry on type 1 (dealing in securities) regulated activities. He was accredited to Chong Hing Securities between January 10, 2011 and February 11, 2014.
He was also licensed to carry on type 1 and type 4 (advising on securities) regulated activities at Chong Hing Bank.
He is not currently licensed by the SFC or registered with the Hong Kong Monetary Authority.