The Securities and Futures Commission (SFC) of Hong Kong has suspended Mr Joey Lo Wai Hon, a former responsible officer of MTF Securities Limited, for four months.
The suspension will run until 29 January 2026. Lo allegedly failed to properly manage credit risks and to identify and report suspicious trading patterns of clients.
The disciplinary action follows the SFC’s findings that MTF failed to maintain effective policies and procedures to ensure the proper management of credit risks and an effective ongoing monitoring system to identify, examine and report suspicious trading patterns, in breach of the Code of Conduct as well as other regulatory requirements on risk management and anti-money laundering and counter-financing of terrorism.
The SFC considers that MTF’s failures were attributable to Lo’s failure to discharge his duties as an RO and a member of the senior management of MTF at the material time.
The SFC’s investigation found that shortly after three cash clients had opened their accounts and deposited only $10,000 with MTF in January 2021, MTF granted each of them a trading limit ranging from $4 million to $5 million at the request of MTF’s substantial shareholder, despite no application was received from the clients and no proper due diligence was done on those clients’ financial status.
The regulator also found that the three clients utilised the trading limits to conduct transactions which were incommensurate with the financial situations of two of them. These transactions further demonstrated suspicious features which should arouse reasonable suspicion of potential market misconduct and money laundering.
However, MTF failed to identify these transactions as suspicious, follow up on them or ensure that they were reported to both the Joint Financial Intelligence Unit and the SFC in a timely manner.
In deciding the disciplinary sanction against Lo, the SFC has taken into account that:
- MTF’s failures are serious as they could undermine public confidence in, and damage the integrity of, the market;
- a deterrent message needs to be sent to the market that such failures are not acceptable;
- Lo cooperated with the SFC in resolving the SFC’s concerns; and
- Lo has an otherwise clean disciplinary record.
