The Eastern Magistrates’ Court today announced that has convicted ETRADE Securities (Hong Kong) Limited (ETrade HK) for actively marketing to the Hong Kong public US brokerage services provided by E*TRADE Securities LLC (ETrade US) which was not a licensee of the Securities and Futures Commission (SFC).
This is the first criminal conviction secured by the SFC against an entity for the offence of actively marketing in Hong Kong regulated activities carried out outside Hong Kong without a licence under the Securities and Futures Ordinance (SFO).
ETrade HK pleaded guilty to aiding and abetting ETrade US in holding itself out as a SFC licensee when it was not. ETrade HK was fined $20,000 and ordered to pay the SFC’s investigation costs.
The SFC alleged that ETrade HK had continually marketed the brokerage services of ETrade US for more than four years from around 11 May 2009 to 31 January 2014 through newspapers, magazines, and on the MTR, television, radio and online.
As a result of the marketing initiatives and services provided to ETrade US’s Hong Kong-based clients, ETrade HK had received revenue from ETrade US.
We remind you that back in 2014 Etrade Australia Securities Limited (Etrade) has also paid a penalty of $55,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP).