Concerns grow for Lawsons clients

PUBLISHED : Wednesday, 05 June, 2002, 12:00am
UPDATED : Wednesday, 05 June, 2002, 12:00am

The Securities and Futures Commission yesterday received another three complaints and 29 enquiries about troubled broker Lawsons Securities.

This means 11 complaints and 85 enquiries have been made to the securities watchdog since the sudden closure of the broker last Friday.

Lawsons Securities was suspended from trading after the SFC found irregularities during an inspection, while police have arrested two employees for alleged theft.

A police spokesman said yesterday the Commercial Crime Bureau was still investigating, and the employees remained on bail.

He said Lawsons clients should contact the SFC which is reviewing how many may have suffered losses and the amounts involved.

An SFC spokesman said the firm had more than 400 active clients who traded at least once a year through the firm.

Lawsons is a sole proprietorship owned by Christopher Law Siu-kong.

The two employees, surnamed Choi, 29, and Cheung, 38, are senior executives of the brokerage house in charge of its day-to-day operations.

Lawsons is the third small broker to encounter trouble in the past six months.

In February, the SFC suspended the operations of Teil Stock Investment and Ying Kit Stock. Police are investigating both cases.

Hong Kong Stockbrokers Association chairman Wilfred Wong Wai-sum said the cases would affect client confidence in small brokers. He urged other brokerages to tighten their internal control systems.

Christopher Cheung Wah-fung, managing director of Christfund Securities, said the SFC was poised to add more regulations governing brokers in the coming months.

'The commission has conducted more inspections during the past few months after the closure of the two brokers early this year. It has also tightened the capital requirement for brokers' margin trading business,' Mr Cheung said.

'The troubles at Lawsons will definitely force the regulator to increase curbs on brokers.'

He said brokers who found it difficult to operate should withdraw from the market in an orderly manner and not allow clients to suffer losses.

A number of large brokers, such as Tai Fook Securities, Mansion House and OSK Asia Group, saw their share prices rise more than 2 per cent yesterday.

Analysts said this could be due to a belief that the Lawsons case might lead investors to shift their trade to larger brokers.