The Court of Eastern Magistrates found Mr. Wong Ming Chung, a licensed representative of the Securities and Futures Commission (SFC), guilty of giving investment advice over a Telegram chat group without the required authorization.
Wong pleaded guilty to charges of carrying on a business of advising on securities even though he was not licensed for that. For this, the court fined him $10,000 and also had to pay the investigation costs of SFC.
Wong holds the SFC license to engage in Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities. He may only act on behalf of the company to which he was accredited but, he is not authorized to act in a personal capacity.
As per the Court’s founding, Wong ran the “FRANKY – 即市直播谷” Telegram chat group, which was open to the public with a subscription, from January 2, 2018, to May 21, 2019.
Wong answered subscribers’ inquiries regarding the performance of the Hang Seng Index and other Hong Kong-listed stocks during this time by providing daily commentary. These actions were carried out without the approval of his accredited firm, which is against SFC rules.
Schedule 5 of the Securities and Futures Ordinance (SFO) classifies this kind of “advising on securities” as regulated activity. Following SFO Sections 114(1)(a) and 114(8), conducting business in a regulated activity without a license from the SFC is prohibited unless there are reasonable circumstances.
Wong surpassed the parameters of his accreditation by providing personal advice through the Telegram group, even though he was licensed.
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