The Securities and Futures Commission said Yan Chee Yung misrepresented his services to 18 clients of Hong Kong-based Chong Hing Securities and Chong Hing Bank between June 2006 and February 2014.
The District Court also Thursday sentenced Yan to imprisonment of 36 months after he was convicted of 18 counts of theft in relation to the misappropriation of approximately $6.9m from clients following an investigation by the police, the SFC said.
The SFC found that Yan misled clients with false promises of buying shares on their behalf at a price lower than market price and also promised them that he would buy back the shares at a guaranteed price.
He also induced the clients to enter into private investment arrangements with him and to give him money to buy shares on their behalf. He then misappropriated their money using it for his own personal expenses, gambling and settling credit card debts. To gain the clients’ trust, he falsified transaction records.
Such conduct demonstrates a serious lack of honesty and integrity, the SFC said in its disciplinary action note, concluding that Yan was guilty of misconduct.
Yan also admitted his misconduct during the SFC’s investigation.
“Yan’s misconduct was gravely dishonest and lasted for more than seven years. He abused the trust which his clients placed in him and his actions resulted in losses to the clients,” the regulator said in its disciplinary action note.
Yan joined Chong Hing in 1996 and had worked at the Tokwawan Branch of Chong Hing Bank in Hong Kong since 2002.
On 11 February 2014, Chong Hing Securities informed the SFC that he had failed to report to duty.
Two clients then claimed that Yan had private investment arrangements with them and failed to return the money that he owed to them. Yan was dismissed by Chong Hing Securities on the same day.
In the run up to the launch of the Hong Kong-China stock market connect, the Hong Kong regulator has been increasingly taking disciplinary actions against many entities and employees. Recently, it also suspended licence of one of the brokers at DBS Vickers.