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Screenshot of a breaking news alert e-mail from Q2 2017
The British Columbia Securities Commission (BCSC) announced on Tuesday that it has imposed a fine and a lifetime ban from the province’s capital markets on Forex trader Hong Liang Zhong.
A BCSC panel has sanctioned Mr Zhong over fraud, unregistered trading and promising clients false guarantees to reimburse them for eventual losses.
The panel found that Zhong was engaged in the business of trading in securities on behalf of his clients without having the necessary registration, and that he committed a fraud by misrepresenting the true nature of his commissions for Forex trading to investors, as he did not inform the investors that he would receive a commission based on the volume traded. The panel also found that Zhong guaranteed at least 10 of his clients that he would return their full principal if they incurred trading losses.
Commenting on the impact of Zhong’s misconduct, the panel said,
“It is trite to say that Zhong’s misconduct has done significant harm to the reputation and integrity of our capital markets. Investors become hesitant to invest in the market if they cannot trust those who trade and advise on securities to be ethical and to carry on these activities in compliance with applicable securities laws.”
The panel imposed a penalty of $401,883.44, reflecting the sum of $390,048.90 Zhong’s clients lost as a result of his misconduct and the $11,834.54 in trading agent fees Zhong earned on these investors’ accounts. Zhong was also ordered to pay an administrative penalty of $250,000.
Zhong was also ordered to resign any position he holds as a director or officer of any issuer or registrant. He is permanently prohibited from becoming or acting as a director or officer of any issuer or registrant. He also got a lifetime ban from trading or purchasing securities or exchange contracts, acting as a registrant or promoter, engaging in investor relations activities, and acting in a management or consultative capacity in connection with the securities market.
You can view the full announcement from the BCSC on the case by clicking here.