SFC also reprimanded its RO, Mr George Chan Yee Lee and Mr Stephen Ng Wing Leung and fined them $100,000 each for failing to comply with the employee account dealing requirements under the Fund Manager Code of Conduct, breaching the basic principle that persons engaged in fund management business, when transacting for themselves, must give their clients priority and avoid conflicts of interest.
SFC’s investigation revealed that, between January 2011 and October 2016:
- none of the staff members of CN Capital had disclosed their personal investment holdings to CN Capital in writing;
- Chan and Ng conducted a total of 3,188 personal trades without obtaining any written pre-clearance from the designated officer of CN Capital;
- in 619 incidents, Chan or Ng held their personal investments for less than 30 days without prior written approval from the designated officer; and
- a total of 996 personal trades of Chan and Ng were conducted in the same stock and on the same day as the transactions conducted for the fund managed by CN Capital.
It appears that this asset management firm had no compliance control over staff dealings at all.
