The disciplinary action follows an SFC investigation into an internal report by A One about suspected fraudulent activities in the account of one of its clients.
The regulator found that, between July and August 2012, 538,000 shares of Li & Fung in a client’s account were sold and a total of €676,000 and £160,000 were transferred out of the client’s account in 13 transfers to third party bank accounts in Italy, Norway, Singapore and the United Kingdom.
The sales and transfers were carried out via instructions that were sent via A One’s email which were authorised by A One responsible officer Alysia Ann Lee.
The client denied that the instructions were given by him and claimed that his email account had been compromised. During its investigation the SFC found that A One did not have any formal procedures in place for handling client requests to transfer funds to third party accounts.
The company was also required to receive a signed letter authorising transfers but, it this case, it only received a scanned copy of a signed authorisation letter that related to just one of the thirteen transfers. In all the other cases scanned copies of signed authorisation letters were received only after the transfers were complete.
A One was also criticised by the Hong Kong watchdog for not taking any steps to verify the identity of the person who gave the transfer instructions and for making no enquiries to satisfy that the transfers were reasonable, given that it did not match the client’s historical pattern of transfers.
SFC also found that Lee had acted negligently in handling the relevant transfers and failed to properly discharge her managerial duties. Her license was suspended for eight months from 29 July 2013 to 28 March 2014.
Last month Credit Suisse was fined HK$1.6m by the SFC for number of failings
