Broker jailed for theft of client's HK$30m
A broker was yesterday jailed for five years and 10 months after he admitted embezzling HK$30 million from a client to fund his own investments.
Broker Liu Ka-hin, 28, who was able to make HK$200,000 a month, was banned from the industry.
Madam Justice Clare-Marie Beeson, in the Court of First Instance, sentenced Liu after he had pleaded guilty to 11 counts of theft, which carry a maximum 10-year jail term.
She also noted in sentencing that the prosecution had not proceeded with five other charges of theft to which Liu had pleaded not guilty.
She said Liu's conduct had undermined public confidence in Hong Kong's financial system and adversely affected the reputation of the Securities and Futures Commission.
But, accepting that Liu had shown remorse and paid restitution of HK$500,000, she gave him a discount on his sentence, also noting Liu had suffered a HK$40 million investment loss and a property market loss.
Liu committed the offences between December 2006 and October 2007 while employed as a broker at Goldbond Securities & Futures, which has since been renamed Piper Jaffray Asia Securities.
He was arrested on February 29 last year, after he had cleared out several bank accounts the previous day.
The court heard that Liu had recommended to his now 61-year-old client Paul Hui Chuen-yick in December 2006 that he invest in new equity-linked notes, which are a form of financial derivative.
Liu had told Mr Hui that it was a 'low-risk, high-return' investment.
In 2007, Mr Hui told Liu that he wanted to sell the notes but Liu kept stalling him. The broker supplied Mr Hui with fake e-mails purportedly sent from an SFC official suggesting that the delay was because of problems at the derivative-issuing bank.
A suspicious Mr Hui approached a Goldbond executive who informed him the derivatives did not exist. Liu then confessed that he had misappropriated Mr Hui's money.
The court heard that Liu had repaid Mr Hui about HK$500,000 and that insurers for Goldbond reimbursed him for the loss of a further HK$29.6 million.
Defence barrister Jackson Poon said Liu had been a caring son and husband but also had a drinking habit which had affected his judgment.
He also said Liu had stolen the money to cover his own mounting trading losses.
