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Unlicensed manager sentenced to community service

Previous unlicensed individuals in Hong Kong were also convicted, but were slapped with fines.
Law and justice concept - Themis statue, judge hammer and books. Courtroom.

The Eastern Magistrates’ Court has sentenced Yau Ka Fai to 240 hours of community service following his conviction for being an unlicensed fund manager in Hong Kong, according to a statement from the SFC.

Earlier this year, Yau pleaded guilty for representing to investors from 2011-2015 that he was a fund manager of a product known as “Tai Chi Hedge Fund” without holding any SFC-related licenses during the period. The fund invested in stocks and futures contracts.

The SFC added that even before 2011, Yau had never been licensed with the regulator in any capacity.

Yau received commission for his service, but the regulator did not elaborate how much money he took from investors.

Lighter sentence?

Other individuals in Hong Kong have also been convicted of operating an asset management business without holding relevant SFC licenses. However, instead of doing community service, they were required to pay fines.

In 2017, Fonia Kwok and Lawrence Ho were caught performing asset management functions under the name Finamics Capital Management without SFC licences. Between 2009-2015, clients of Finamics agreed to pay a monthly commission of 40%-50% of the net profit generated from the management of the investment portfolio. Nine clients, who invested a combined HK$7.5m ($960,000) with Finamics, suffered combined losses of HK$2.5m.

Both Kwok and Ho pleaded guilty and were fined HK$5,000 ($645) and HK$4,000 ($516), respectively, and ordered to pay the SFC’s investigation costs. In addition, Kwok, who was the sole proprietor of Finamics, was banned from re-entering the industry for one year by the SFC.

In 2014, Tam Kwok Pui was convicted of providing asset management services to a client he recruited during an investment seminar he organised without obtaining any licences from the SFC. Tam pleaded guilty and was fined HK$10,000 for the offence. The court also ordered him to pay the SFC’s investigation costs.

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