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Screenshot of a breaking news alert e-mail from Q2 2017
The Securities and Futures Commission (SFC) has revoked the licences of Goodcape Securities Limited and its two responsible officers, Mr Tang Lin Sun and Mr Chang Siu Ming.
Tang and Chang have also been prohibited from re-entering the industry for life and three years from 15 December 2016 to 14 December 2019 respectively.
The disciplinary action followed SFC’s investigation which found that Goodcape, which was prohibited from holding client assets and was required to place all orders with an execution broker as part of its licensing conditions as an introducing broker, had deliberately failed to relay trading instructions from a large number of clients to an execution broker.
The trading instructions of these clients had been passed to Tang instead of the execution broker. Clients also deposited funds into bank accounts controlled by Tang at the request of Chang and other Goodcape’s licensed representatives in the belief that the funds had been used to settle their securities transactions.
In order to conceal the deceptive scheme, bogus account statements had been issued to the clients while their deposited funds were withdrawn in cash or transferred to the personal bank account of Tang or his wife. A sum of approximately $90.5 million had been withdrawn from these bank accounts by Tang.
Chang, who failed to communicate order instructions of a number of Goodcape’s clients to the execution broker at Tang’s behest, had turned a blind eye to the deposit of funds by clients and connived in the issue of bogus statements.
The SFC is of the view that Goodcape, Tang and Chang are guilty of misconduct and are not fit and proper to remain licensed.