Hong Kong's Securities And Futures Commission Bans Koo Yiu Chee For Eight Months

The Securities and Futures Commission (SFC) has banned Mr Koo Yiu Chee from re-entering the industry for eight months from 10 September 2013 to 9 May 2014 (Note 1).

An SFC investigation found that while Koo was an account executive at China Everbright Securities (HK) Limited (CES), he failed to perform proper account opening and know-your-client procedures and falsely represented that he had explained the risk disclosure statements and witnessed the execution of the account opening documents in relation to a number of his clients who resided in the Mainland (Note 2).

The SFC found that:

Koo operated from the office of a CES affiliate in Shenzhen (CESPR), and made use of middlemen employed by CESPR to refer clients to him and to handle the new clients’ account opening procedures.
Koo had not met the clients referred to him by the middlemen but nonetheless signed on their account opening documents as a witness and declared that he had explained to them the account opening documents and the risk disclosure statements.

The SFC considers Koo’s misconduct called into question his fitness and properness as a licensed person. In deciding the sanction, the SFC took into account all relevant circumstances which included:

failing to observe the know-your-client requirements may encourage trading malpractices and unlawful activities;
Koo’s signing as witness on the account opening documents of clients he had never met was dishonest; and
Koo’s clean disciplinary record.

Koo had appealed the SFC’s decision to the Securities and Futures Appeals Tribunal (SFAT). On Koo’s application, the SFAT granted leave for him to withdraw his appeal on 10 September 2013 (Note 3).

Notes:

Koo was licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activity and was accredited to CES from 27 January 2004 to 27 March 2010. Koo is currently not licensed by the SFC and has no accreditation.
The SFC has taken disciplinary actions against CES and its responsible officer Mr Chan Kam Hop as a result of the same investigation. Please see the SFC’s press release dated 11 April 2013. Koo is the “Mr X” referred to in the press release.
Please see SFAT Application No. 2 of 2013 published on the SFAT’s website at www.sfat.gov.hk.
A copy of the Statement of Disciplinary Action in relation to the matter is available on the SFC website.