Hong Kong's Securities And Futures Commission Bans Suen King Shan For Four Years

The Securities and Futures Commission (SFC) has banned Mr Suen King Shan from re-entering the industry for four years from 22 December 2015 to 21 December 2019 over breaches of the SFC’s Code of Conduct (Notes 1 & 2).

The SFC found that Suen had failed to perform proper account opening procedures in relation to the accounts (Nominee Accounts) opened in the names of his mother, his aunt and his cousin-in-law (Nominees) at his then employer, Ko’s Brother Securities Company Limited (Ko’s Brother Securities). Despite being their account executive at the material time, he did not conduct know-your-client procedures with the Nominees and left the account opening matters to his wife, who was not a staff member of Ko’s Brother Securities. He also falsely declared on his mother’s account opening forms that he had witnessed her signature and explained the contents of the risk disclosure statement to her.

Moreover, Suen was found to have executed his wife’s instructions to place orders in the Nominee Accounts without verifying whether the transactions were authorized by the Nominees. Suen’s wife did not have the required authorization to operate the Nominee Accounts at the material time.

Furthermore, Suen was found to have conducted personal trading in the Nominee Account opened in the name of his cousin-in-law. In doing so, he concealed his beneficial interest and personal trading activities in this account, in breach of the employee code of share trading of Ko’s Brother Securities.

The SFC is of the view that Suen’s conduct was in breach of the Code of Conduct and called into question his fitness and properness to be a licensed person (Note 3).

In deciding the penalty, the SFC took into account all relevant circumstances, including that:

• Suen’s conduct was dishonest and he had abused the trust that Ko’s Brother Securities had placed in him;
• his conduct had made it possible for his wife to open the Nominee Accounts and carry out personal trading in them;
• he was an experienced practitioner and as such, he either knew or ought to have known that his conduct was improper;
• his misconduct was serious even though no reported loss was suffered by the clients; and
• he had no previous disciplinary record with the SFC.  

Notes:

1. Suen was first registered as a securities dealer’s representative on 6 April 1988. He became licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activity on 27 May 2003 and was accredited to Ko’s Brother Securities Company Limited from 27 May 2003 to 31 December 2014. Suen is currently not a licensed person.
2. The Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
3. General Principles 1 and 2 of the Code of Conduct require licensed persons to act honestly, fairly, with due skill, care and diligence, and in the best interests of their clients and the integrity of the market, in conducting their business activities; licensed persons are required under paragraph 5.1 of the Code of Conduct to take all reasonable steps to establish the true and full identity of their clients and their financial situation, investment experience and investment objectives; at the material time, under paragraph 7.1 of the Code of Conduct, a licensed person should not effect a transaction for a client unless before the transaction is effected the client, or a person designated by the client, has specifically authorized the transaction, or the client has authorized in writing the licensed or registered person to effect transactions for the client without the client’s specific authorization. (Paragraph 7.1 of the Code of Conduct has been amended since 1 December 2012).