The Securities and Futures Commission of Hong Kong has prohibited Ms Joanna Chu Lai Wa, a former responsible officer, director and head of dealing of Guosen Securities (HK) Brokerage Company, from re-entering the industry until 22 June 2021. This relates to Guosen's failures to comply with anti-money-laundering (AML) rules when handling third-party fund deposits.

The firm committed this misconduct between November 2014 and December 2015 and was fined HK$15.2 million (US$1.93 million) for it by the SFC. During this period at least 102 HNW clients received third-party deposits which were incommensurate with their net worth as declared on their account-opening forms. Some clients withdrew some third-party deposits shortly after receiving the funds without using them for trading. Also, certain third parties made numerous deposits to the accounts of Guosen’s clients and had no apparent relationships with these clients. The total number and value of third-party deposits involved were 780 and approximately HK$990 million respectively.

Guosen had processed 10,000 third-party deposits for more than 3,500 clients in this period. These totalled approximately HK$5 billion (US$645 billion).

Some of AML problems came to the attention of Guosen's senior management - including Chu - in 2013. However, Chu thought that the matter was irrelevant to her and did not take any steps to correct them. Her inaction contributed to Guosen’s failure to put in place adequate AML internal controls during the material time.

Chu also received records of third-party deposits from Guosen’s head of settlement which showed that, contrary to Guosen’s purported policy to discourage third-party deposits, it was processing untold numbers. Chu took no action and did not escalate the matter to her supervisor or other members of the senior management team.

She also failed, in her capacity as one of the approvers of account opening applications, to ensure that Guosen’s staff adhered to their written procedures for assessing clients’ money-laundering risks by keeping notes of the process.