The Securities and Futures Commission (SFC) has prohibited Mr Lawrence Lai, a former representative of UOB Kay Hian (Hong Kong) Limited and UOB Kay Hian Futures (Hong Kong) Limited (collectively, UOB Hong Kong), from re-entering the industry for 10 years from 2 November 2016 to 1 November 2026 for breach of the Code of Conduct (Notes 1 & 2).
The disciplinary action follows an SFC investigation into the trading of Nikkei Futures contracts in an account of UOB Hong Kong after a tsunami struck Japan on 11 March 2011.
The SFC found that Lai:
- falsely declared that he was not related to a holder of a client account;
- carried out discretionary trading in secret and without proper authorization;
- caused inaccurate and misleading account statements to be issued to a client;
- misled his employer that he was reducing the risk exposure of the client’s account when in fact he was substantially increasing the risk position; and
- acted against the best interests of the client by trading without sufficient equity in the account to meet the margin requirement and margin call, which resulted in a trading loss of nearly $50 million.
Lai’s conduct, which fell short of the standard set out in the Code of Conduct, casts doubts on his fitness and properness to be a licensed person (Note 3).
- Lai was licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities and was accredited to UOB Kay Hian (Hong Kong) Limited and UOB Kay Hian Futures (Hong Kong) Limited until April 2011. Lai is not currently licensed by the SFC.
- Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission
- General Principle 1 (honesty and fairness) of the Code of Conduct provides that a licensed person should act honestly, fairly, and in the best interests of its clients and the integrity of the market.
Leave us a comment!
Error, group does not exist! Check your syntax! (ID: 3)