Under SFO, people who are not satisfied with SFC's certain decisions (e.g. disciplinary action) may appeal to the Securities & Futures Appeal Tribunal (SFAT). Usually SFAT upholds SFC's decisions to impose penalities on the applicant, but in some cases SFAT may reduce the penalty level.
SFAT recently upheld SFC's decision to ban Mr Lee On Ming Paul, formerly a Type 1 representative of Fullbright Securities Ltd, for life. SFC found that Lee had deceived his employer by opening two nominee accounts in false names and concealing his personal trades. In doing so, Lee also forged the signatures of his sister-in-law on the account opening documents as well as on cheques issued for settlement. Lee lodged an application to SFAT on 31 July 2007 to review SFC's decision against him. SFAT issued the Determination on 9 Nov 2007.
SFAT rejected the argument that Lee had merely been "foolish" or "sloppy" in the manner in which he had conducted his affairs. No kidding - many people would utter such argument after they are caught red-handed - just like children! SFAT was satisfied that SFC's findings plainly were borne out by the evidence, and could not reasonably be criticized, far less set aside by this tribunal.
Although SFAT upheld SFC's reasoning, it varied the period of Lee's ban from life to 18 months. This is a fundamental difference - it appears that SFC's original decision was considered "too harsh"!
The SFC starts off with a very harsh penalty. One has to use all available means to get it reduced. At least you have to use renowned lawyers to plead for you (just to reduce the penalty, not against the case!!!!) After a lot of communications (or until the SFC have got tired on a case); the SFC would agree to adjust the penalty.
ReplyDeleteThis practice is not subject to being challenged as you can hardly find fault about it. Yet, it wastes a lot of time and money of licensed people; and their anxiety, worries during the period. That is heavy penalty.
In future some guys may even claim compensation from SFC for causing them a mental distress!
ReplyDeleteI hope this will become an acceptable cause of action in future.
ReplyDeleteI have seen cases lasted for 3-4 years (e.g. from the completion of on site exam to receiving a letter from the enforcement).
I am not sympathy for the wrongdoers (in fact I want they all hanged), but prolong investigation should not be allowed for the benefit of the victims.
SFC people are relying on the unlimited resources to impose unproportional penalty.