"Expert" Advice

There are so many people claiming themselves to be a "god of stock market", no matter they are licensed by SFC or not.

A man was convicted of placing a series of advertisements in newspapers promoting unlicensed securities advice business and for conducting that business without an SFC licence.

Mr Cheng Chun Lung Mondy pleaded guilty to 19 charges in the Eastern Magistracy. He received a jail term of four months suspended for two years and a fine of $10,000 on one count of conducting an unlicensed securities advice business. He was also fined a total of $36,000 in respect of 18 separate offences of issuing advertisements promoting an unlicensed securities advice business. The Court also ordered Cheng to pay total investigation costs of $7,192 to SFC.

SFC prosecuted Cheng after an investigation which found that he placed a total of 18 advertisements in three newspapers -- Apple Daily, Oriental Daily News, and The Sun --between Aug and Nov 2007, offering to provide advice on the buying and selling of specified stocks for a fee.

The advertisements, many with bold headings promising "sure wins", invited investors to pay $5,000 per month, or a trial fee of $500 for two days, in return for tips on one or two "must trade stocks" every day.

Cheng's advertisements were also misleading because they represented that:

• his advice provided investors with a "sure win";
• he could provide investors with a 90% chance of making intraday profits;
• he could predict the market trend;
• he could guarantee profits in the long run;
• profits are guaranteed or investors can get their money back.

SFC also found that Cheng had no expertise in advising clients about stock trading.

I think the advice given by Cheng is equally sub-standard and unreliable as that given by "Uncle 4"? The differences are:

1. Uncle 4 would not be prosecuted for conducting an unlicensed securities advice business;
2. Uncle 4's advice has a more far-reaching impact on the investing public (Shall SFC follow up on this issue?).