Hong Kong's Securities and Futures Commission (SFC) has publicly reprimanded Victory Securities and imposed a fine of HK$1.7 million for regulatory breaches in handling a client's account. The SFC has also temporarily suspended the license of Victory Securities' responsible officer and core function supervisor, Zhao Ziliang (male), for three months, effective from July 22, 2026, to October 21, 2026.
The misconduct was uncovered during an SFC investigation into a suspected "ramp and dump" scheme. The regulator found that a client opened an account with Victory Securities on October 29, 2019, and indicated an intention to sell securities held with another brokerage firm through Victory Securities. Shortly after opening the account, the client issued two sell orders and provided statements allegedly from other brokers as proof of share ownership.
Despite multiple red flags—including that the value of the client's claimed shareholdings was inconsistent with the financial status declared in the account opening documents—which should have prompted Victory Securities to conduct more rigorous verification of the client's information, the company failed to make sufficient inquiries or obtain satisfactory explanations regarding the warning signs before executing the orders. Furthermore, subsequent information suggested the client may have provided false documents to facilitate one of the transactions, yet Victory Securities did not report the client's potentially fraudulent or deceptive conduct to the SFC.
The SFC concluded that Victory Securities' handling of the client's account fell short of the standards required under the Code of Conduct, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, and the associated guidelines applicable to licensed corporations. The regulator determined that Victory Securities' failures were attributable to Zhao's failure to diligently fulfill his duties as the firm's responsible officer and senior management member.
In reaching its decision on these sanctions, the SFC took into account all relevant circumstances of the case, including that this was an isolated incident; there was no evidence of systemic deficiencies in Victory Securities' internal controls; the firm has since improved its internal policies and procedures and implemented mandatory staff training to prevent similar recurrences; Victory Securities and Zhao cooperated with the SFC to resolve the matter; and Zhao had no prior record of SFC disciplinary actions.
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