Photo: Leaprate
The Hong Kong Securities and Futures Commission (SFC) announced reprimanding Fulbright Securities Limited (Fulbright) and imposing a fine of $3.6 million for internal control failures relating to short selling and for failing to report related short selling incidents to the SFC in a timely manner as required by the SFC’s Code of Conduct.
The Hong Kong watchdog’s investigation found that between Oct, 2015 and Mar, 2016, there were at least 93 instances of short sales executed by Fulbright which resulted from its failure to put in place effective internal control procedures to detect and prevent illegal short selling.
The regulator also found that Fulbright failed to report these incidents to the SFC immediately upon discovering them.
In deciding the disciplinary sanction, the SFC took into account that adequate and effective internal control systems are fundamental to the fitness and properness of a licensed corporation and that Fulbright’s short selling failures lasted for at least six months. However, Fulbright has cooperated in resolving the SFC’s concerns and accepted the findings and disciplinary action of the SFC. The company had also taken measures to rectify its internal control deficiencies in relation to the detection and prevention of short selling after the incidents and Fulbright had an otherwise clean disciplinary record.
Reprinted from Leaprate, the copyright all reserved by the original author.
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