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SFC secures conviction for provision of paid investment advice on Telegram chat group without licence

Issue date: 2024-06-20 16:55:44

The Eastern Magistrates’ Court today convicted Mr Wong Ming Chung for providing investment advice on a subscription-based chat group on Telegram he hosted without a licence in a prosecution brought by the Securities and Futures Commission (SFC) (Note 1).

Wong pleaded guilty to a charge of carrying on a business of advising on securities when he was not licensed to do so and was fined $10,000. He was also ordered to pay the SFC’s investigation costs.

Although Wong is an SFC-licensed representative, he can only act for the firm to which he is accredited. In this instance, Wong operated the Telegram chat group in his personal capacity (Note 2).

The Court found that between 2 January 2018 and 21 May 2019, Wong hosted a chat group on Telegram named “FRANKY - 即市直播谷” which was opened to members of the public on a subscription by payment basis. On every trading day, Wong circulated commentaries and responded to subscribers’ questions in the Telegram group regarding the performance of the Hang Seng Index and various Hong Kong-listed securities.

The SFC reminds investors to check the SFC’s Public Register of Licensed Persons and Registered Institutions on the SFC website (www.sfc.hk) before investing to ensure that firms and people who provide investment advice on securities are properly licensed.

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Notes:

1. Under Schedule 5 of the Securities and Futures Ordinance (SFO), “advising on securities” is a type of regulated activity under the SFO. Under sections 114(1)(a) and 114(8) of the SFO, it is an offence for a person, without reasonable excuse, to carry on a business in a regulated activity without a licence from the SFC.
2. Wong is, and was at the material times, licensed under the SFO to carry on Type 1 (dealing in securities) regulated activity and Type 4 (advising on securities) regulated activity, and accredited to a licensed corporation. Wong can only act for that licensed corporation, being his principal, in carrying out the licensed regulated activities but the Telegram group was not operated for or on behalf of that licensed corporation.

Source: SFC