The Securities and Futures Commission reprimands and fines China Rise Securities Asset Management Company for regulatory breaches and internal control failures, including the inability to identify illegal short selling orders placed by its own chief executive.
According to the SFC, China Rise’s former CEO, Sammy Shiu Kin Keung, placed 199 illegal short selling orders through his own and a client’s account. The firm was not aware of the orders made until the Hong Kong Exchange and Clearing made inquiries about the transactions but still subsequently field to detect and prevent further short selling.
China Rise was fined HK$6.5 million ($830,000) for its lack of adequate controls that led to regulatory breaches including failure to maintain proper records of order instructions and compliance checks for over 1,000 transactions.
Shiu was eventually convicted in June 2017 for illegal short selling of three listed companies between April and May 2014.
