Hong Kong's SFC Reprimands and Fines YSL Excutive $400,000

​The Securities and Futures Commission (SFC) Monday announced that it has reprimanded Mr Raymond Leung Tak Shing, chief executive officer, director, compliance officer and money laundering reporting officer of Yardley Securities Limited (YSL), and fined him $400,000 for failures in complying with anti-money laundering regulatory requirements.

The disciplinary action comes after the SFC fined YSL $5 million for failures in complying with anti-money laundering and counter-financing of terrorism (AML/CFT) regulatory requirements when handling third party fund transfers.

The SFC found that YSL’s breaches at the material time were attributable to Leung’s failures to discharge his duties as a member of YSL’s senior management.

In particular, Leung, who was responsible for handling and approving third party fund transfers at YSL, approved such transfers in two client accounts between February and May 2016 without sufficient scrutiny, nor documenting the enquiries he claimed to have made at the relevant time, despite numerous indicators suggesting that some of them were unusual or suspicious.

As the senior management personnel responsible for overseeing YSL’s AML/CFT systems, he also failed to ensure that YSL had adequate systems in place to mitigate the risks of money laundering and terrorist financing during the relevant period, and that YSL’s staff were provided with adequate AML/CFT training.

In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including that:

• Leung adopted a lax attitude when handling a substantial amount of third party transfers in the clients’ accounts; and

• YSL’s failures, which lasted for at least nine months, were attributable to Leung’s failure to discharge his duties as a member of YSL’s senior management.

Back to the end of last month, SFC has reprimanded Deutsche Securities Asia Limited (DSAL) and fined it $2.45 million​ for issuing incorrect statements to its prime brokerage (PB) clients and delaying reporting its failures to the SFC.