Ex-Fulbright Securities Account Executive is Found Guilty of Fraud by a Hong Kong Court

The Eastern Magistrates' Court in Hong Kong has found former Fulbright Securities account executive Danny Fung Kwong Shing guilty of fraud.

This comes five years after the Hong Kong Securities and Futures Commission (SFC) imposed a lifetime ban on Kwong Shing's participation in the business.

Kwong Shing was convicted of engaging in fraud or deception while conducting securities transactions governed by the Securities and Futures Ordinance.

The SFC said on Friday that the former Fulbright Securities executive will remain in detention until his October 27 sentencing.

The Hong Kong securities regulator stated that Kwong Shing pled guilty to all 25 counts filed against him by the SFC.

According to SFC, Kwong Shing admitted during the court that he improperly exploited two clients' funds and securities between August 2, 2013 and December 16, 2013.

The regulator reported that the executive admitted to conducting fraudulent transactions in eight stocks with the two accounts, purchasing shares at inflated prices with one client's fund and selling them at bargain rates to his friend's (and client's) account.

"This series of transactions resulted in a $172,890 trading profit for his acquaintance and a $48,331 loss for his customer," the SFC stated.

SFC's Lifetime Prohibition

In 2017, the SFC penalized Kwong Shing $542,071 and permanently banned him from the nation's trading business.

The financial markets regulator discovered that he executed 772 unlawful transactions in the account of his friend-client at Fulbright Securities between January 2013 and December 2014.

In addition, according to the watchdog, he faked a telephone call tape to deceive Fulbright Securities into believing the purchase was placed by his acquaintance.

In addition, Kwong Shing impersonated a second friend-client over the phone and placed orders on their account with a different Enhanced Securities Limited.

SFC noted that as a result, the executive secured a profit for the second friend-client while the first friend-client lost $2.6 million due to unlawful activities on his account.

Earlier this year, the SFC discovered multiple compliance violations at Hong Kong-based online brokerages.

The regulator examined fifty licensed businesses that provide online brokerage, distribution, and consulting services in the country.

In addition, the SFC discovered that brokers opened 96% of their accounts in the past year using non-face-to-face onboarding methods.