The Securities & Futures Commission has banned Yeung Hon-fat from re-entering the industry for life for operating secret accounts.

The commission found that in late 2005, while acting as a responsible officer of KGI Futures (Hong Kong), Yeung concealed his personal options trading through an account under his brother-in-law's name, resulting in a margin deficit of over $13 million.

Yeung conducted unauthorised trading in two other clients' accounts, resulting in a total margin deficit of over $1.5 million, and coached one of these two clients to assume responsibility for Yeung's unauthorised trades and to lie to KGI about these unauthorised trades for Yeung to evade his own liability.

Yeung also coaxed a subordinate to become the nominal account executive of these clients.

Dishonest behaviour

The commission's Executive Director of Enforcement Mark Steward said operating secret accounts is a form of market misconduct and dishonest behaviour. The commission will deal with it seriously.

Yeung was formerly licensed under the Securities & Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities as a responsible officer of KGI Asia , KGI Futures (Hong Kong) and KGI Securities (Hong Kong).