Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded, imposed a fine of RM20,000 and ordered to strike off Chan Ling Ern (CLE) from the Register if she was still a Registered Person of Bursa Securities for misconducts/breaches relating to personal/unauthorised trades in the account of a client (Client A) and misapplication of Client A’s monies.
CLE, who was at the material time of the breaches a Salaried Dealer’s Representative of RHB Investment Bank Berhad at its Kemaman branch office, had contravened and/or triggered the provisions of Rules 3.14(d), (e), (f), (h) & (i), 3.47(1)(m)(i) and 15.09(a), (g), (i)(iii) & (i)(vi) of the Rules of Bursa Malaysia Securities and Paragraphs 1.1(1)(e) and 11.2(a) of Directives No. 5-001 of the Participating Organisations’ Directives and Guidance (POs’ Directives).
The finding of the breaches and imposition of the sanctions on CLE were made pursuant to Rule 15.02 of the Rules of Bursa Malaysia Securities after according due process to CLE and taking into consideration all facts and circumstances, including the severity and extent of the breaches by CLE.
Bursa Malaysia Securities views seriously misconducts that impinge on the professional conduct and integrity of Registered Persons and compromise clients’ protection as such misconducts may adversely affect and damage market integrity and public confidence. Bursa Malaysia Securities will not hesitate to take appropriate action against anyone who engages in such misconducts, including imposition of fines and suspension/restriction/striking off a Registered Person from the Register commensurate with the severity of the breach.
BACKGROUND
(1) CLE had carried out a significant number of personal/unauthorised trades in Client A’s account (including the sale of Client A’s paid shares) over a period of several months without Client A’s knowledge, consent or instruction. She had also wrongfully misapplied/used Client A’s trust monies or caused Client A’s trust monies to be applied/used to fund the trades which had resulted in trading losses in Client A’s account.
(2) CLE had carried out the aforesaid personal/unauthorised trades in Client A’s account to generate brokerage to meet her performance target in order to be rewarded by her broker.
(3) The sanctions, in particular the fine and striking off, were imposed on CLE having considered, amongst others, the following:-
- the materiality and extent of the breaches committed by CLE;
- even though CLE had reimbursed the trust monies to Client A, it did not absolve her from liability for the breaches;
- the need to uphold investor protection which is one of the fundamental obligations/duties of a Dealer’s Representative (DR) and cornerstone of market integrity;
- CLE’s dishonest misconducts (which could have gone undetected/continued had Client A not requested for the withdrawal of his trust monies) had impinged on her integrity and honesty as a Registered Person and brought into question whether she was a fit and proper person to be in the industry; and
- CLE’s asserted mitigating factors and extenuating circumstances.
(4) The public reprimand was imposed on CLE as a deterrent consideration so as to create market awareness and reinforce the serious view taken by Bursa Malaysia Securities for cases involving abuse of clients’ accounts/monies by DRs.
(5) As a Registered Person acting in the capacity of a DR, CLE must at all times:-
(a) observe professional conduct and standards of integrity;
(b) act honestly and in the best interest of her client; and
(c) not abuse/misuse client’s account and monies.
