The Securities and Futures Commission (SFC) has banned Ms Cham Nga Yin from re-entering the industry for life for misappropriation of clients’ money. Cham was a former licensed representative of Tanrich Futures Limited (Tanrich Futures), now known as Southwest Securities (HK) Futures Limited (Note 1).
The SFC found that Cham succeeded in persuading two clients to open accounts at Tanrich Futures in mid-2014. The clients went on to deposit $40,000 and $200,000, respectively, into Tanrich Futures. Instead of completing the account opening process for the clients, Cham misrepresented to Tanrich Futures that the deposits were made by her cousin, whose account at Tanrich Futures was under her control.
Subsequently, a sum of $137,500 out of the $240,000 deposits from the two clients was transferred to Cham’s personal bank account via her cousin’s Tanrich Futures account and personal bank account between June and August 2014.
Cham’s misappropriation of the deposit of one client was uncovered in August 2014 when the client’s husband called Tanrich Futures to enquire about his wife’s account. Cham eventually returned $40,000 to the client upon Tanrich Futures’ request.
In September 2014, Cham resigned from Tanrich Futures, but she continued to keep the deposit of the other client and provided that client with two forged account statements in November 2014 and April 2015 in order to conceal her misconduct. Tanrich Futures did not find out Cham’s misappropriation of that client’s deposit until 28 April 2015, when it received the client’s enquiry about her account. Cham eventually returned $200,000 to the client.
The SFC decided to ban Cham for life as her dishonesty was in breach of the Code of Conduct for Persons Licensed by or Registered with the SFC (Code of Conduct), which called into question her fitness and properness to be a licensed person (Notes 2 & 3).
- Cham was licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities. She was accredited to Tanrich Securities Company Limited, now known as Southwest Securities (HK) Brokerage Limited, to carry on Type 1 (dealing in securities) regulated activity from 25 May 2006 to 30 September 2014 and Tanrich Futures to carry on Type 2 (dealing in futures contracts) regulated activity from 30 September 2005 to 30 September 2014. Cham is currently not licensed by the SFC.
- General Principle 1 (honesty and fairness) of the Code of Conduct provides that a licensed person should act honestly, fairly, and in the best interests of its clients and the integrity of the market.
- General Principle 8 (client assets) of the Code of Conduct provides that a licensed person should ensure that client assets are promptly and properly accounted for and adequately safeguarded.