Securities and Futures Commission (SFC) of Hong Kong: Victory Securities Fined $1.7 million for Regulatory Breaches, and Its Responsible Officer's License Suspended

July 24th, the Securities and Futures Commission of Hong Kong announced that Victory Securities Limited was reprimanded and fined HK$1.7 million for breaching regulatory requirements while handling a client account. The responsible person and Head of Core Functions, Chiu Tsz Leung, had his license temporarily suspended for 3 months, from July 22, 2026, to October 21, 2026.

The misconduct was discovered by the Securities and Futures Commission during an investigation into a suspected 'pump and dump' scheme. The client opened an account on October 29, 2019, and subsequently issued sell instructions twice, providing statements purportedly from other brokers as proof of holding. Despite significant discrepancies between the holding value and the financial condition declared in the account opening documents, Victory Securities failed to conduct sufficient due diligence before executing the instructions and did not provide a reasonable explanation for the red flags.

Subsequent information revealed that the client may have submitted false documents to facilitate one of the transactions, but Victory Securities did not report the related fraudulent or deceptive conduct to the regulator. The Commission considered that their handling did not meet the required standard of the Code of Conduct and anti-money laundering regulations and guidelines, with the deficiencies stemming from Chiu Tsz Leung's failure to fulfill his duties as a responsible officer and senior management member.

When deciding on the disciplinary action, the Commission took into account that this was an isolated case and did not find any systemic weaknesses in Victory Securities' internal controls; the company has since enhanced its policies and procedures, conducted mandatory training, cooperated with the investigation, and Chiu Tsz Leung had no prior disciplinary record.