The Securities and Futures Commission has reprimanded and fined Radland International HK$1.5 million for the firm's weak internal control system that resulted in its staff stealing client assets since 1998. The SFC investigation found two former employees of Radland - Leung Moon-tong and Rick Ma Ching-ning - had misappropriated client assets amounting to more than HK$6 million on different occasions. The commission already revoked the licences of Leung and Ma in 2006 and banned them from re-entering the securities industry for life. To cover up their activities, Leung and Ma altered Radland's computer records of stockholdings in client accounts. They then sent false transaction records to the affected clients. The commission said weaknesses in internal controls and supervision of staff at the firm had resulted in failure to safeguard client assets. 'This is one of the most serious cases of system and control failure contributing to client loss,' said Mark Steward, executive director of enforcement at the SFC. In deciding on the penalty, the commission had taken into account the seriousness of internal control failures and the prolonged breakdown of primary controls. In addition, Radland has yet to compensate the clients who suffered the losses. But the SFC said Radland had co-operated with the commission in its investigation and had even appointed an independent accounting firm to review its internal control system. Radland lodged an appeal to the Securities and Futures Appeal Tribunal in March this year challenging the penalty but not its liability. The appeal tribunal, however, upheld the commission's decision and rejected Radland's submission yesterday.