SFC disciplines firm for black-market trading
The Securities and Futures Commission has taken disciplinary action against a foreign exchange trading company for allowing clients to trade on the illegal futures markets in Macau.
The SFC said it had publicly reprimanded Hong Kong Forex Investment (HKFI), formerly Tse's Forex Investment, and its major shareholder, Tse Shiu-hoi, as well as Leung Ting-wai, general manager of Sincere Finance Holdings.
Mr Tse and Mr Leung were managing the forex company during the investigation between September 1999 and September 2000. The SFC said in that period, the forex trading company had introduced clients to trade so-called 'black futures' through a subsidiary in Macau.
The black futures market refers to dealing in Hang Seng Index futures contracts which is not conducted through the Hong Kong Futures Exchange. Companies involved in black futures usually solicit clients by charging a low or no-margin deposit, but investors have no protection against default payments.
The SFC said that since both Mr Tse and Mr Leung were not registered with the SFC, it could only publicly reprimand them for their misconduct. It said had they been registered, their licences would have been revoked.
The SFC also suspended the licences of senior HKFI executives. They included Fung To, suspended for 12 months, Wong Tak-choi (six months) and Chan Yuk-kiu (one month).
The commission publicly reprimanded responsible director Li Chi-on, as well as account executives including Candy Choy Sik-chun, Lee Mei-mei, Lai Siu-fong, Richard Wan Chi-keung, Ng Mei-chu and Wan Chi-shing.
The SFC said HKFI had taken measures to ensure employees no longer engaged in black market activities. Mr Tse also gave the SFC a written undertaking that he would not be involved in HKFI's day-to-day management.