The two agents, Lau Chun Yin and Chau Chi Ho, worked for Universal Insurance Consultants and Brokers, and were fined $10,000 each by the Eastern Magistrates Court and ordered to pay the Securities and Futures Commission’s costs, after pleading guilty last week.
Universal Insurance Consultants and Brokers and its sole director, Au Mei Chun, was also prosecuted for aiding and abetting the Lau and Chau. The company and Au pleaded not guilty and the case was adjourned until 13 September 2012 for a pre-trial review.
The case relates to events in September 2005 when Lau and Chau advised two clients to invest in a fixed income fund through Perfect Asset Management Limited (PAML) – a SFC licensed corporation that both Lau and Chau were not accredited to at the time.
The SFC alleged that UIC and Au arranged for a licensed representative accredited to PAML, who had never met the two clients, to sign on the subscription documents purporting to be their investment representative. UIC then paid commissions to Lau and Chau for the deals.
Under section 114 of the Securities and Futures Ordinance, a licensed representative can only carry on a regulated activity for principal to which he is accredited.
