SFC reprimands and fines Fulbright Securities Limited HKD3.3 million and Suspends its Responsible Officer
The Securities and Futures Commission (SFC) has reprimanded and fined Fulbright Securities Limited (Fulbright) HKD3.3 million for internal control failures relating to its placing activities and recording of client order instructions.
The SFC has also suspended Fulbright’s responsible officer, Mr Eric Liu Chi Ming, for six months from 29 October 2021 to 28 April 2022, the SFC said in a press release.
The disciplinary action followed an SFC investigation which found that Fulbright, when acting as a placing agent in the share placement of a Hong Kong-listed company in August 2018, had failed to:
- exercise due skill, care and diligence and continuously monitor its business relationship with clients when processing the placement subscription applications; and
- act in the best interests of its clients during the placement.
The SFC also found that during the period from 1 November 2017 to 31 July 2019, Fulbright had failed to:
- properly record and maintain order instructions in relation to a total of 580 client orders;
- effectively implement policies and procedures, and diligently supervise its account executives to ensure client orders were handled in compliance with the applicable order handling regulatory requirements;
- establish and maintain appropriate and effective procedures for its telephone order recording compliance reviews; and
- report immediately to the SFC after it became aware of its account executives’ breaches of the applicable telephone order regulatory requirements.
The evidence shows that Liu was responsible for managing and supervising Fulbright’s business operations in regulated activities at the material time and the firm’s failures were attributable to Liu’s failure to discharge his duties as a responsible officer and a member of Fulbright’s senior management.
In deciding the disciplinary sanction, the SFC took into account Fulbright’s and Liu’s cooperation in resolving the SFC’s concerns. In addition, Fulbright has also agreed to engage an independent reviewer to conduct a review of its relevant internal controls and undertaken to implement the reviewer’s recommended rectification measures.
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