The Securities and Futures Commission (SFC) of Hong Kong has prohibited Mr Wu Chao, a former responsible officer, manager-in-charge (MIC) and chief operations officer of DA International Financial Service Limited, from re-entering the industry for three years and seven months.
The penalty is effective from 26 June 2024 to 25 January 2028.
The disciplinary action follows an SFC investigation, which found that between February and April in 2022, Wu concealed from DA his beneficial interest in and that he had direct control or influence over a securities margin account held by a third party at DA. He also failed to obtain DA’s approval for the securities transactions conducted by him in the account.
By doing so, Wu’s conduct circumvented DA’s employee dealing policy and prevented it from monitoring his personal trading activities. In all, the unauthorised transactions conducted in the account at the material time totalled $7.3 million.
Wu also abused the right granted to him as a member of DA’s senior management. He made 33 unauthorised adjustments to the margin loan limit of the account and the margin financing ratios of certain callable bull/bear contracts (CBBCs) traded in the account. As a result, he was able to trade more CBBCs in the account and conceal the unauthorised adjustments from DA’s detection.
The SFC considers that Wu’s conduct is dishonest and it calls into question his fitness and properness to be a licensed person.
In deciding the sanction against Wu, the SFC has taken into account all relevant circumstances, including his misconduct lasted for over a month involving 190 transactions, as well as the need
to send a deterrent message to the market that the SFC does not tolerate deliberate circumvention of internal control policies by licensed individuals.
