SFC fines Black Marble Securities Ltd HK$1.8m for internal control failings and regulatory breaches
The firm is owned by Lerado Financial (1225), part of the Enigma Network.
SFC reprimands and fines Black Marble Securities Limited $1.8 million for internal control failings and regulatory breaches
Issue date: 2021-03-31 17:31:24
The Securities and Futures Commission (SFC) has reprimanded and fined Black Marble Securities Limited (Black Marble Securities) $1.8 million for internal control failings and breaches of the SFC’s Code of Conduct (Notes 1 & 2).
The disciplinary action follows an SFC investigation after receiving Black Marble Securities’ report of a client complaint against one of its licensed representatives for allegedly conducting unauthorized trading activities in the client’s account from August 2016 to July 2017.
The SFC’s investigation found deficiencies in the internal controls of Black Marble Securities, including:
- inadequate internal controls for monitoring trading activities in client accounts;
- no procedures to characterise and identify client accounts without derivatives knowledge, nor were further enquiries made with the client to ensure he understood the risks associated with exchange-traded derivatives notwithstanding his lack of derivatives knowledge and the sudden increase of warrant trades in his account;
- no procedures to ensure that its compliance manual and other internal policies and procedures were adequately and properly communicated to all staff members; and
- no written policy on employee dealings particularly specifying the conditions under which employees may deal for their own accounts nor requiring employees to identify all related accounts and reporting them to the senior management.
In deciding the sanction, the SFC took into account all relevant circumstances, including the duration of Black Marble Securities’ failures and its otherwise clean disciplinary record.
- Black Marble Securities is currently licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activity.
- Code of Conduct for Persons Licensed by or Registered with the SFC.