In addition, the SFC suspended the approval granted to Connie Leung Wing Kam to act as a responsible officer for Solomon, and suspended her licence for seven months. In a statement on its website, Solomon announced that Leung will take on “a new strategic role with the firm.”
The SFC’s action followed an investigation which found that Solomon had entered into an arrangement in which Black Swan, a member of the Hong Kong Confederation of Insurance Brokers, referred clients to Solomon.
In exchange, Black Swan received commissions for trades executed by Solomon, on behalf of the referred clients. Black Swan employees who made the referrals also performed “services in regulated activities” to the referred clients.
According to the SFC, Solomon was aware that “the arrangement with Black Swan required participants to be properly licensed by the SFC, and that none of the Black Swan employees had been granted a SFC license.” As Leung was primarily responsible for devising the arrangement, it added, she bore direct responsibility for Solomon’s conduct.
Solomon said Leung, its managing director and founder, will focus on the expansion of its professional team. In relation to the reprimand notice, Solomon said the “joint venture” with Black Swan ceased in 2010, and “all outstanding concerns with the SFC have been rectified.”
It added: “SIFA would like to emphasize none of its clients were disadvantaged, nor materially impacted in any ways as a result of the joint venture’s activities. The penalty imposed will have no material impact on the company’s current financial position.
“SIFA has, and will continue to meet the Financial Resources Rule (FRR) and remains in a financially strong position which is well capitalized to fund its future growth.”
