According to an inspection report submitted by Maybank Kim Eng and a complaint from a client and the SEC’s further investigation, it was found that during August 2011 – October 2018, {A} sent trading orders of derivatives and shares in large volumes without the client’s authorization. When the client’s account suffered a large amount of loss, {A} tricked the client into depositing more cash into the derivatives trading account in order to continue trading. She later made a summary trading report under the client’s account and sent it to the client for acknowledgement. In so doing, she concealed the trading transactions she executed herself without the client’s permission. In addition, in May and November 2017 and August 2018, {A} asked the client to affix signature on the confirmation of backdated trading transactions even though the client did not come to the trading room to order the transactions herself to earn compensation at a higher amount than she should have actually received. {A}’s acts were deemed as seeking unfair benefits from investor by taking advantage of her duty performance.  

In addition, during May 2018, {A} failed to execute the client’s order to buy shares of a company and did not inform the client of such act. When the client asked for dividends from such shares, {A} transferred her own money to the client’s account instead to conceal the fact that she had not bought the shares as ordered, which was deemed a failure to comply with the investor’s order. 

{A}’s misconduct above contravened rules and regulations set forth in the Notification of the Capital Market Supervisory Board.*  In particular, she failed to properly discharge her professional duties with loyalty, to provide services with honesty, and to perform her duties with professional due care. The SEC therefore suspended approval as an investment consultant for complex products type 1** for a period of two years, five months and seven days, effective from 17 March 2021. However, since her approval period ends on 31 March 2021, the suspension thus ends concurrently. In this regard, the SEC will not accept her future application for approval as capital market business personnel, starting from 31 March 2021 until the original suspension period ends in two years, five months and seven days.  

In considering the appropriate administrative sanction, the SEC takes into account the following factors: the involvement and behavior of the person under consideration; the penalty he/she has already served; the impacts, loss or benefit incurred; any steps taken to rectify past conduct; the cooperation or obstruction with SEC’s investigation; and any previous record or past behavior which indicating that the subject person is not fit and proper to work in capital market business. 

The SEC strongly advises that investors check their trading accounts regularly to prevent other persons from using the accounts to trade securities without the investors’ authorization. Besides, transaction conformation documents must always be monitored to make sure that they are issued by the servicing securities company. In case of suspicion, investors should contact the compliance officer of the securities company without delay. In any case, investment consultants are not allowed to make investment decisions for investors, no matter if the investors give a consent or not, and they have to perform professional duties with loyalty and integrity at all times. 

_____________________________

Remarks: 

* Pursuant to Clause 23(1) and 23(2) and the prohibited characteristics of personnel in the capital market business under Clause 31(1) of the Notification of the Capital Market Supervisory Board No. Tor Lor Thor. 8/2557 Re: Rules on Personnel in the Capital Market Business dated 3 June 2014 (Notification No. Tor Lor Thor. 8/2557), as amended by the Notification of the Capital Market Supervisory Board No. Tor Lor Thor. 48/2560 Re: Rules on Personnel in the Capital Market Business (No. 7) dated 30 August 2017.

** Investment Consultant of Complex Products Type 1 is approved to give investment advice on non-complex capital market products as well as all types of high-risk or complex products. For example, investments units of mutual funds offered for sale to institutional investors or ultra-high net worth investors, investment units of mutual funds investing in derivatives, hybrid instruments, structured notes and derivatives.