The
Securities and Futures Commission (SFC) of Hong Kong has imposed a lifetime ban
on Xie Yangxiong, the Director of Wansom Asset Management (WAML) and Wansom
Securities (WSL).
The
decision follows an extensive investigation that found Yangxiong at the
core of false and misleading financial information submitted during the
licensing applications for the firms.
SFC Bans Xie Yangxiong for
Life
As the lone
figure controlling both companies’ bank accounts, Yangxiong manipulated the
firms’ financial data by artificially meeting liquid capital requirements
during licensing. The funds were promptly withdrawn after the applications were
submitted. That move would have led to a denial of both licenses if the money had not
been temporarily deposited.
These
manipulative actions were initiated during the licensing applications for WAML
and WSL, in July and August of 2018, respectively. After acquiring the licenses,
the mismanagement of funds continued, with Yangxiong removing funds from the
companies for personal use.
This
resulted in the companies’ liquid capital deficits varying from $1.58 million
to $3 million from July to October 2018. The SFC stated that WAML’s and WSL’s
misconduct resulted directly from the director’s actions.
SFC Wants to Send a Strong
Message
In
determining the lifetime ban, the SFC considered various factors. Yangxiong’s integrity
was found to be compromised, plus the regulator aimed to send a strong message
to the industry about its zero-tolerance policy towards attempts to mislead the
commission.
On the
other hand, since WAML and WSL had not conducted any regulated activities prior
to their license suspensions, and no clients were affected by their regulatory
failures, these factors were considered less severe. Additionally, the director’s
clean disciplinary record before this incident was taken into account.
This case reminds
industry participants about the SFC’s commitment to maintain market
integrity and its readiness to take decisive action against any financial abuse
that undermines that integrity.
In the
past, the regulator has used similar penalties. In 2021, the SFC took action
against IDS Forex HK Limited’s two Co-CEOs, Chung Wooman and Ki Bonggan, and
banned them for life from re-entering the financial industry.
In a recent event in March, the SFC banned Philip John Shaw, a former irresponsible officer, Board
Member and Head of Pan-Asia Execution Services of Citigroup Global Markets Asia
Limited (CGMAL), for severe regulatory breaches. According to the regulator’s
statement, Shaw cannot re-enter the financial industry for the next ten years.
Also, the
securities regulator in Hong Kong has pressed charges against 24 individuals
for engaging in market manipulation. These charges come after a thorough
investigation conducted by the SFC and the Hong Kong Police Force, targeting suspected money laundering cases.
This article was written by Damian Chmiel at www.financemagnates.com.
