The Hong Kong Securities and Futures Commission (SFC) has suspended Mr Wu Biwei, former responsible officer (RO) and managing director of iSTAR International Futures Co. Limited, now known as Rifa Futures Limited (Rifa), for six months from 16 June 2017 to 15 December 2017.
The disciplinary action follows the SFC’s sanctions against iSTAR over its failures to comply with anti-money laundering regulatory requirements when processing third party fund transfers between January and July 2014.
The SFC found that Wu, who was Rifa’s most senior person at the relevant time, was contributory to Rifa’s failure to have proper safeguards in place against the risks of money laundering and terrorist financing associated with third party fund transfers.
In particular, Wu, who was responsible for approving third party deposits and transfers, failed to:
- make appropriate enquiries to ensure third party fund transfers were consistent with the customers’ known legitimate activities, and maintain records of such enquiries; and
- implement internal policies effectively for the prevention of money laundering and terrorist financing, and communicate such policies to staff members.
Wu also breached Rifa’s internal policies on employee dealing by exploiting Rifa’s lax controls. In essence, he made deposits of substantial amounts into various clients’ accounts, and received substantial third party deposits in his trading account at Rifa when he needed additional margin to trade but did not have sufficient funds.
Furthermore, Wu breached the Securities and Futures (Client Money) Rules by causing a payment of US$200,000 from the account of a client to be made into his own.
In deciding the disciplinary sanction, the SFC took into account all relevant circumstances including Wu’s otherwise clean disciplinary record.