Hong Kong’s securities regulator has banned Li Tak-Wa from re-entering the industry for 15 months for executing trades without a client's written authorisation, among other things. The period runs from yesterday to 17 September 2015.
The action follows a Securities and Futures Commission (SFC) investigation, which found that Li, a former employee of Kaiser Securities and Kaiser Futures:
- knowingly recorded incorrect information about a client in the client’s account opening forms;
- made transactions in the client’s accounts on a discretionary basis without obtaining written authorisation from the client; and
- conducted more than two day trades and opened short options positions in the client’s futures account without obtaining the client’s prior written approval specifically authorising such trades.
Although there was evidence that the client verbally authorised Li to trade in her accounts on a discretionary basis, the lack of written authorisation avoided monitoring and supervision by Li’s employer.
Li also ignored requirements that he obtain the client’s prior written approval when conducting more than two day trades and opening short options positions in the client’s futures account.
This deprived the client of an opportunity to make an informed decision before such transactions were conducted on her behalf, and was prejudicial to both Li’s employer and Li’s client.
The SFC considered that Li’s conduct showed a readiness to ignore important safeguards and calls into question his fitness and properness as a licensed person.
In deciding the penalty, the SFC took into account all relevant circumstances, including Li’s experience in the industry and his otherwise clean disciplinary record at the time of the misconduct.
Li was licensed to carry on type 1 (dealing in securities) and type 2 (dealing in futures contracts) regulated activities and was accredited to Kaiser Securities and Kaiser Futures between March 12, 2004 and November 30, 2012. He is not currently licensed by the SFC.