The Securities and Futures Commission of Hong Kong has suspended the licence of Ms Sandra Cheung Wing Yi, a former licensed representative of Mason Securities Limited, for 12 months until 27 October 2021, for flouting the internal policies of her brokerage firm.

An SFC investigation found that, between November 2014 and July 2017, Cheung failed to obtain approval to maintain a securities trading account with an external brokerage firm and conducted 66 personal trades in that account, thereby contravening Mason Securities’ internal control policies. Cheung opened the account in July 2013 and closed it in August 2017.

She also provided false and misleading declarations to her employer by stating often that she did not have any personal trading accounts with other licensed corporations. In doing so, Cheung deprived Mason Securities of the opportunity to effectively and actively monitor and review employee trading activities in order to protect the integrity of the market. The regulator has referred to her conduct as "wilful and dishonest" and has invented a new word to describe a quality that she lacks - "properness."

Cheung is licensed as a representative under the Securities and Futures Ordinance to carry on Type 1 (Dealing in Securities) regulated activity. Mason Securities used to be known as GuocoCapital Limited before 2016.

According to Mason Securities’ Internal Operating Policy on Employee Dealings (Employee Dealing Policy), employees were required to:

• obtain prior written approval from their managers for maintaining and trading through securities trading accounts with other licensed corporations;
• provide Mason Securities with duplicate monthly statements of such accounts to ensure that their trading was not in breach of the Employee Dealing Policy; and
• complete and sign the Employee’s Annual Declaration Form on the first day of reporting duty and in each January to confirm their understanding of and satisfaction with the Employee Dealing Policy.

The Employee Dealing Policy is in accordance with paragraph 12.2 of the Code of Conduct for Persons Licensed by or Registered with the SFC, which requires licensed corporations to evolve procedures and policies to circumscribe trading on the part of employees and to monitor the trading activities in their employees’ accounts and in related accounts.