Wednesday, October 16, 2019
 
Columnist
Martin Hennecke

Two firms fined for mishandling money
 
11/07/2019
 
<p>The Securities and Futures Commission yesterday reprimanded Celestial Commodities and Celestial Securities, subsidiaries of CASH Financial Services Group (0510) and fined them HK$4.9 million and HK$1.4 million, respectively for regulatory breaches and internal control failures in relation to the mishandling of client money.</p><p>The SFC found that for the purpose of operational convenience, Celestial Commodities transferred approximately HK$44 million on about 180 occasions between January 2009 and December 2016 from its client accounts to pay monthly commission rebates to its account executives.</p><p>The amounts involved in each transfer ranged from HK$249,000 to more than HK$1 million.</p><p>The SFC also found that Celestial Securities effected payments totaling HK$40 million on July 8, 2015 from its client trust accounts into Celestial Commodities&#39; client trust accounts in an intra-day fund swap arrangement so that Celestial Commodities could meet various margin calls from the Hong Kong Exchanges and Clearing (0388) on time.</p><p>Meanwhile, Celestial Commodities and Celestial Securities had failed to implement proper controls to safeguard client money and supervise its staff in handling it and that their accounting and treasury staff were effectively given a free reign in handling client money with little supervision, instructions or guidance, SFC said.</p>

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