The Hong Kong Securities and Futures Commission has reprimanded and fined Victory Securities Company Limited HKD 1.7 million and suspended its responsible officer and manager-in-charge, Stephen Chiu Che Leung, for three months from 22 July 2026 to 21 October 2026. The sanctions follow findings that Victory mishandled a client account by failing to investigate clear red flags around the client’s claimed shareholdings and by failing to report suspected fraudulent or deceptive conduct to the regulator. The issues emerged during a separate investigation into a suspected ramp-and-dump scheme. The SFC found that after opening an account on 29 October 2019, the client quickly placed two sell orders and provided statements purportedly issued by other brokerages to show he held the shares. Victory proceeded despite indications that the client’s purported holdings were inconsistent with his declared financial profile and without obtaining satisfactory explanations. Later information suggested the client may have used false documents to facilitate one of the transactions, but Victory did not report that conduct to the SFC. The regulator said the firm’s conduct fell short of requirements under the Code of Conduct, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, and the related anti-money laundering and counter-financing of terrorism guideline for licensed corporations. It attributed the failures to Chiu’s neglect in discharging his duties as a responsible officer and senior manager. In setting sanctions, the SFC took into account that the case was isolated, found no evidence of broader internal control weaknesses, and noted remedial steps, cooperation and Chiu’s otherwise clean disciplinary record.

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