Hong Kong's Securities And Futures Commission Suspends Ku Yuen Leung For 18 Months

The Securities and Futures Commission (SFC) has suspended the licence of Mr Ku Yuen Leung, an account executive of BOCOM International Securities Limited (BOCOM), for 18 months from 23 August 2016 to 22 February 2018 for engaging in manipulative activities (Note 1). 

The disciplinary action follows an SFC investigation which found that between 5 and 26 November 2010, Ku created a false or misleading appearance in the market with respect to the shares of Agricultural Bank of China Limited (ABC) by placing large-sized bid orders for ABC shares to drive up the prices of five related call warrants (Note 2).

All the bid orders in ABC shares which were cancelled immediately after Ku sold the related warrants at inflated prices for profit were apparently not driven by genuine demand but intended to influence the market making decision of their liquidity providers.

Ku made a gross profit of $15,500 from trading the warrants.  

In deciding the sanction, the SFC is of the view that Ku’s misconduct has undermined the integrity of the market and that he is not a fit and proper person to remain licensed.

Ku, who had applied to the Securities and Futures Appeals Tribunal (SFAT) for a review of the SFC’s sanction, was granted leave to withdraw his appeal on 23 August 2016 (Note 3).

Notes:

1. Ku is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities. He ceased to be accredited to BOCOM International Securities Limited on 28 July 2016.
2. The five call warrants involved were: DB-AGBK@EC1105A, DB-AGBK@EC1104, CS-AGBK@EC1104C, CS-AGBK@EC1104D, and CS-AGBK@EC1103B.
3. Please see SFAT Application No. 5 of 2016 published on the SFAT’s website at www.sfat.gov.hk.