In July 2005, SFC successfully prosecuted a guy Micheal Ng for advising on futures contracts whilst unlicensed. Between Aug and Nov 2004, Ng set up a website and invited the public to join as members. By paying a monthly subscription, members had access to the advice given by Ng on the website regarding trading in HSI futures contracts.
This was a typical case about unlicensed online advising, but not the end of the story. Yesterday SFC suspended another guy Kimball Chan, a licensed representative of a licensed stockbroker Ho Fung Shares Investment, for 6 weeks. Chan was found to have aided and abetted Ng to set up the website and publish advice on futures trading in the paid section of the website.
Chan acted as a channel of communication for the website’s technical and administrative matters, and an intermediary for the transfer of funds relating to the website between Ng and other parties.
I think if Chan was not licensed dealer, he would not be prosecuted for aiding & abetting unlicensed activities; otherwise web hosting companies as a conduit may face a legal risk for hosting an illegal website.
P.S. According to SFC's press release, Kimball Chan has been suspended since 5 Sep 2006 (i.e. yesterday). But up to this morning (6 Sep), the disciplinary record has not yet been reflected in SFC's online register for him.
I have the feeling that SFC has high expectation on licensed rep. these days.
ReplyDeleteI however of the view that, although the SFC licence is not easy to get, the licensing status is not competible to other qualfications like legal qualification, accounting qualification. At least, it is not recognised as an academic qualification allowing you to further your studies (or the opportunity is limited).
Yet, licensees are expected to uphold all the relevant laws and codes etc. Even a lawyer does not know all the laws. How can you reasonably expect that licensees exercise high standard of care?
Perhaps the SFC should tighten up the licensing regime so as to allow only very "professional" people to practice in the industry.