The Securities and Futures Commission (SFC) has prohibited Mr Lui Pak Tong (also known as Patrick Lui), a former licensed representative of Thunder Capital Limited (Thunder), from re-entering the industry for life.
The SFC also fined Lui $17.43 million, equivalent to the profit he gained from his misconduct (Notes 1 and 2).
The SFC’s investigation found that, between September 2017 and June 2020, Lui, in his official capacity as Thunder’s investment analyst, caused a segregated portfolio of a fund managed by Thunder (Fund) to extend five unsecured loans totalling $22.5 million (Loans) to a company under his control (Company). In this connection, he recommended to Thunder’s Investment Committee that the Fund extended the Loans to the Company without disclosing the conflicts of interest arising from his involvement in the Company and failed to ensure fair treatment of the Fund and its investors.
The SFC’s investigation also revealed that Lui had in fact established Thunder, the Fund and the Company with his associates, and all three entities were effectively under his control. Lui subsequently caused a substantial portion of the Loan proceeds that the Company received to be transferred to himself or persons connected with him, including his wife. In the end, the Fund only received $5.07 million in interest payments from the Company, while Lui and his connected persons pocketed $17.43 million.
The SFC considers Lui’s conduct to be wilful and dishonest, thereby calling into question his fitness and properness to be licensed. His conduct also constitutes breaches of the Code of Conduct and the Fund Manager Code of Conduct (Note 3).
In determining the sanctions against Lui, the SFC took into account all relevant circumstances, including:
- Lui exploited the Fund’s investors and gained a profit of $17.43 million at their expense; and
- excluding Lui from the industry is necessary to safeguard the investing public and uphold market integrity.
Notes:
- Lui was accredited to Thunder as a licensed representative for Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance between 25 July 2017 and 31 August 2020. Lui is currently not licensed by the SFC.
- Thunder changed its name to Yupei Fortune Capital Limited in February 2021. Its licence with the SFC was revoked on 31 July 2024.
- Please refer to the Statement of Disciplinary Action for the relevant regulatory requirements.
A copy of the Statement of Disciplinary Action is available on the SFC website
