The Hong Kong Securities and Futures Commission (SFC) has announced that it has fined Ewarton Securities Limited USD1.5 million for breaches of internal control and violations of the SFC’s Code of Conduct. The penalty follows the SFC’s sanctions against Mr Mung Wai Sun, a former Ewarton licensed representative. Between May 2017 and March 2018, he carried out transactions in a client’s account without obtaining the client’s prior written permission and did not guarantee that the transactions made on behalf of the client took precedence over orders for his own account.
The regulator found that Ewarton’s failure to supervise Mung and establish adequate and effective internal controls had led to its inability to detect and prevent his unauthorized or improper activities and to ensure that customer orders were given priority over the orders of its employees.