Tuesday, December 11, 2018
 
Columnist
Martin Hennecke

SFC bares teeth on 60 market rogues
 
11/10/2018
 
The Securities and Futures Commission said it would charge 60 individuals or companies next year as it probes 100 entities relating to misconduct, especially networks formed by credit financial companies, brokers, and some listed companies. Executive Director for Enforcement Thomas Atkinson said "the team is now targeting and addressing approximately 100 more entities and individuals within this group. Our goal is to complete all these high-priority investigations by the end of 2018." He said the commission was considering taking legal proceedings against approximately 60 companies and individuals by the first half of next year. He also said SFC would bring civil and criminal proceedings, including seeking compensation orders where appropriate against these entities and individuals. Atkinson said the SFC has now investigated 30 cases of suspected sponsor misconduct involving 28 sponsor firms and 39 listing applications. The commission has already issued proposed disciplinary notices to nine firms and four sponsor principals. "We are still considering more disciplinary notices against other sponsor firms and principals," he said. Atkinson said a large percentage of companies on the list consists of firms with operations on the Mainland, and this gives rise to some especially thorny evidentiary problems. He said the commission has collaborated externally with the China Securities Regulatory Commission to assist in gathering evidence and sharing of knowledge. He also said the SFC's corporate fraud team is pursuing 136 active investigations and it had chosen 28 cases that were deemed particularly serious last year. Within this group, trading in the shares of 14 listed companies had been suspended. Last year, the aggregate fines imposed by the commission amounted to approximately HK$63 million. "This year, we have already imposed HK$191 million in financial penalties, excluding the HK$400 million fine paid by HSBC last year," he ssaid. Atkinson said that while the Hong Kong market has problems, it continues to be one of the safest in the world for investors. Meanwhile, Chief Executive Carrie Lam Cheng Yeut-ngor has suggested the ICAC's collaboration with the SFC and concerned professional bodies to assist listed companies in establishing or reviewing their anti-bribery management systems and enhancing the disclosure of their anti-corruption measures. Meanwhile, SFC Executive Director of Investment Products Christina Choi said technical issues relating to the ETF Connect have yet to be resolved. These include the cleaning system in the A-shares market which is different from that in the Hong Kong market. She said the SFC has been communicating closely with the China Securities Regulatory Commission regarding various issues and they would work hard to resolve them.

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