VANCOUVER, Dec. 8, 2015 /CNW/ - A British Columbia Securities Commission (BCSC) panel has fined and permanently banned Hong Liang Zhong from the province's capital markets for fraud, unregistered trading and offering clients false guarantees to reimburse them for any losses.
In May 2015, the panel found that Zhong recruited 14 people to open Forex accounts, over which he was given trading authority. The panel determined that Zhong was engaged in the business of trading in securities on behalf of his clients without being registered, and that he perpetrated a fraud by misrepresenting the true nature of his commissions for Forex trading to investors (Zhong failed to inform the investors that he would receive a commission based on the volume traded). The panel also found that Zhong guaranteed at least 10 of his clients that he would return their full principal if they suffered trading losses, a breach of the Securities Act.
Discussing the impact of Zhong's misconduct, the panel wrote, "It is trite to say that Zhong's misconduct has done significant harm to the reputation and integrity of our capital markets. Investors become hesitant to invest in the market if they cannot trust those who trade and advise on securities to be ethical and to carry on these activities in compliance with applicable securities laws."
The panel ordered that Zhong pay to the BCSC $401,883.44 (the sum of $390,048.90 being the amount Zhong's clients lost as a result of his misconduct and the $11,834.54 in trading agent fees Zhong earned on these investors' accounts). Zhong was also ordered to pay an administrative penalty of $250,000.
The panel ordered that Zhong resign any position he holds as a director or officer of any issuer or registrant, and he is permanently prohibited from becoming or acting as a director or officer of any issuer or registrant. He is also permanently banned from trading or purchasing securities or exchange contracts, acting as a registrant or promoter, engaging in investor relations activities, and acting in a management or consultative capacity in connection with the securities market.
You may view the sanctions decision on our website (www.bcsc.bc.ca) by typing Hong Liang Zhong or 2015 BCSECCOM 383 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
About the British Columbia Securities Commission (www.bcsc.bc.ca)
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE British Columbia Securities Commission
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