Two former securities staffers banned by SFC
A former female employee at a Hong Kong securities firm has been banned from re-entering the industry for five years until May 2018 after being found guilty of insider dealing.
Hong Kong's Securities and Futures Commission (SFC) released a statement to say that Zeng Huiyu had traded in the shares of Canadian energy company Nexen on the New York Stock Exchange days before an announcement last July that energy company CNOOC planned to acquire Nexen for $15.1 billion.
The purchases were conducted for a personal account Zeng held with GF Securities (Hong Kong) Brokerage, where she was employed, and for three client accounts for which she had discretionary authority.
On the day of the announcement, Nexen shares had risen about 52% to $25.90 per share, from $17.06 at the previous day's close. Zeng immediately sold almost all of the shares, resulting in profits of $202,000 for her account, and $1.24 million for her clients, according to an SFC filing.
The regulator’s actions follow an investigation into Zeng’s trading activities by the US Securities and Exchange Commission. It was the SEC that commenced the insider dealing allegations.
Separately, the SFC prohibited Andy Pau Chin Hung from re-entering the industry for 10 years from yesterday to May 6, 2023, after an investigation revealed he had assisted a third party to open three nominee securities trading accounts to dispose of certain shares of a listed company.
Pau had facilitated the disposal of the shares and, in return, accepted a pecuniary advantage via the securities trading accounts under his mother’s, sister’s and his own name which were not disclosed to his employer. He had maintained these secret accounts for almost three years.
At that time he had been accredited to KGI Asia and KGI Futures (Hong Kong), although his licence had lapsed on May 11, 2011. Pau was licensed to carry on type 1 (dealing in securities) and type 2 (dealing in futures contracts).
He had applied to the Securities and Futures Appeals Tribunal for a review of the SFC’s decision but withdrew the application on May 6. Hence the SFC's decision to prohibit him from re-entering the industry now takes effect.