A former representative of Rexcapital Securities has been charged with not following customer identity procedures and providing false information at an interview. According to a Securities and Futures Commission enforcement notice, during an investigation by the regulator, Lee Siu Hung failed to take reasonable steps to verify the identity of a person placing orders with him. Cindy Tam, an SFC spokeswoman, said licensed persons should take all reasonable steps to establish the true and full identity of clients, have account opening documents properly verified, and be satisfied on reasonable grounds about the origination of instructions and beneficiaries in relation to transactions.
The SFC has suspended Lee’s licenses after its investigation found that in December 2002 Lee became aware that an account executive of Celestial Securities placed orders for a client’s account at Rexcapital but in his interview with the SFC in July 2003 he claimed the client had placed the orders. Lee only told the SFC the truth when confronted with contradictory evidence in his second interview in December 2003, the SFC enforcement notice stated.
The SFC concluded that Lee’s was guilty of misconduct and his fitness and properness had been called into question and decided to suspend his licenses for six months in March 2006. Eugène Goyne, a SFC director of enforcement, said in a statement that all licensees are expected to cooperate with the SFC at all times by giving true and complete answers to our questions. “We will suspend licensees found to have deliberately or recklessly given us misleading information,” he added.
Maggie Tin, group compliance manager at Rexcapital, said in a statement that the firm has been fully cooperative during the course of the SFC’s investigation. She added that Rexcapital’s strict internal control and compliance procedures--which includes the monitoring and recording telephone conversations between clients and representatives--meant it was able to provide all the necessary information that SFC required to facilitate their investigation.