HongKong's Securities And Futures Commission: Unlicensed Futures Contract Adviser In Jail Custody After Conviction

The Eastern Magistrates’ Court today convicted Mr Gordon Mui Kwong Yin for providing online advice on trading in futures contracts without a licence and remanded him in jail custody pending sentence (Note 1).

The Court heard that between November 2009 and July 2010, whilst unlicensed, Mui, in the name of “Brandon Chan” also known as “Futures King”, offered to provide trading advice on Hang Seng Index and the Hang Seng China Enterprises Index futures contracts in the form of “futures trade signals” on a website (https://sites.google.com/site/futuresking88) (Note 2).

The website charged a subscription fee of $300 per “signal” or $900 for four “signals” and claimed that by following the advice, subscribers would be able to make a profit of 500 to 800 index points in the investment of the futures contracts each time. Mui received approximately $128,700 from 113 subscribers for his advisory service.

Mui pleaded guilty to the offence. Magistrate Mr Joseph To indicated that one concern he has is that in sentencing, the amount of fine to be imposed should be sufficient in stripping the defendant of the profits earned by the defendant in the illegal activity, otherwise it would render the legislation ineffective and lacks deterrent effect.

The Magistrate adjourned the case to 14 November 2013 for sentencing.

The Securities and Futures Commission (SFC) reminds investors that they should not deal with anyone who promises guaranteed riches from securities or futures dealing. They should always check whether the person is licensed by the SFC to give advice (Note 3).

Notes:

1. Mui was convicted under section 114 of the Securities and Futures Ordinance, under which, it is an offence to carry on a business in regulated activities, including advising on futures contracts, without an SFC licence.
2. In order to carry on a business of advising others whether to enter into futures contracts, which futures contracts to enter into, when to enter into them and the terms and conditions on which to enter into them, a person must have an SFC licence. Mui’s “futures trading signals” given via the website constituted such advice.
3. Investors can check if a firm or person is licensed on the SFC website (www.sfc.hk).