The Securities and Futures Commission (SFC) has suspended Ms Loretta Lee Si Kar, a responsible officer (RO), manager-in-charge (MIC) and director of Tung Tai Securities Company Limited (Tung Tai), for three months and two weeks from 1 December 2025 to 14 March 2026 (Note 1).
The disciplinary action follows the SFC’s sanctions against Tung Tai for its failures relating to unauthorised sales of client securities and transfers of client funds between 6 September 2019 and 18 February 2020 (Note 2).
The SFC considers that Tung Tai’s failures were attributable to Lee’s neglect of her duties as an RO and a member of the senior management of Tung Tai during the material time.
The SFC’s investigation found that Tung Tai, acting on instructions from a bogus email address similar to that of an overseas client, sold shares in the client’s account and transferred the sale proceeds totalling US$3,301,740 to three overseas bank accounts that were not designated by the client. Apart from the incorrect email address, there were other signs of potential irregularities, including telegraphic transfer rejections by multiple banks, but Tung Tai did not act on these red flags and continued to process the fund transfers (Note 3).
The SFC found that Tung Tai failed to ensure that client assets were adequately safeguarded. Tung Tai also failed to establish effective internal control procedures to protect client assets from theft, fraud and other acts of misappropriation (Note 4).
In deciding the disciplinary sanction against Lee, the SFC has taken into account that:
- Tung Tai’s failures to put in place adequate internal controls to safeguard client assets are serious, as they could expose clients to risk of substantial loss arising from theft, fraud and other acts of misappropriation;
- Lee cooperated with the SFC in resolving the SFC’s concerns; and
- Lee has an otherwise clean disciplinary record.
Notes:
- Lee is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities and has been accredited to Tung Tai and approved to act as its RO since 16 September 2004. Lee was also Tung Tai’s MIC for risk management between 6 July 2017 and 12 June 2023, and has been its MIC for overall management oversight, operational control and review, key business line, compliance, and anti-money laundering and counter-terrorist financing, since various dates from 6 July 2017.
- Tung Tai was reprimanded and fined HK$900,000 by the SFC for failures relating to unauthorised sales of client securities and transfers of client funds. Please see the SFC’s press release dated 13 November 2025.
- Tung Tai transferred the sale proceeds of US$3,301,740 from the client’s account to three bank accounts in the United States through four telegraphic transfers (TT) pursuant to instructions from the bogus email address. Tung Tai processed such fund transfers without making enquiries with the client even though in the preceding three months, two different banks in Mexico and Canada had rejected several TTs it processed based on instructions from the bogus email address. In addition, the beneficiary addresses for the TTs provided in the false instructions were different from that of the client as provided in the account opening documents.
- Since the incident, Tung Tai has made compensation to the client, taken remedial measures to enhance its order placing and trade execution procedures for the client to avoid similar incidents in the future, and engaged a firm of independent reviewers to review its internal controls in respect of safeguarding of client assets.
A copy of the Statement of Disciplinary Action is available on the SFC website
