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The Securities and Futures Commission (SFC) has suspended Mr Sky Cheung Shi Gaii for 30 months from 4 April 2013 to 3 October 2015 and fined him $500,000 for trading with a concealed securities account, putting himself in a conflict of interest position and making false and inaccurate declarations in a newspaper investment column (Note 1).
An SFC investigation found that:
- Cheung, while accredited to Quam Securities Company Limited (Quam), failed to disclose a securities trading account in his wife’s name. The trades conducted in the concealed account were therefore not subject to Quam’s monitoring as required by the Code of Conduct (Note 2 & 3);
- Cheung had put himself in a conflict of interest position by trading in the stocks that were the subject of his column in Apple Daily. From March 2009 to March 2010, Cheung made a profit on numerous occasions by selling part or all of the stocks in his wife’s securities accounts, after making positive comments or favourable recommendations in his Apple Daily column on the same day or within three business days after its publication;
- Cheung had instructed his assistant to delay the publication of favourable comments on certain stocks until the stocks were purchased in his wife’s accounts; and
- Cheung had made false and inaccurate declarations about the stock holdings in his wife’s accounts while writing about these stocks in his investment column in Apple Daily.
The fine imposed on Cheung is approximately equivalent to the profits he made in the above transactions.
Notes:
- Cheung is licensed as a representative accredited to Polaris Securities (Hong Kong) Limited to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 9 (asset management) regulated activities since August 2010. Cheung was licensed as a representative accredited to Quam to carry on Types 1, 2 and 9 regulated activities from July 2008 to June 2010.
- Code of Conduct for Persons Licensed by or Registered with the SFC.
- Paragraph 12.2(b) of the Code of Conduct provides that any transactions for employees’ accounts and related accounts should be separately recorded and clearly identified in the records of the licensed or registered person, and transactions of these accounts should be reported to and actively monitored by senior management of the licensed or registered person who should maintain procedures to detect irregularities and ensure that the handling by the licensed or registered person of these transactions or orders is not prejudicial to the interests of the licensed or registered person’s other clients.
- A copy of the Statement of Disciplinary Action in relation to the matter is available on the SFC website.
