The Securities and Futures Commission (SFC) has fined China On Securities Limited (China On) $6 million for its failures as a placing agent in a share placement. China On was appointed as the placing agent by the majority shareholder of Hon Corporation Limited to procure subscribers for shares representing up to 45% of Hon Corp’s total issued share capital. The SFC found that China On had failed to act within the scope of the Vendor’s authority and safeguarded the Vendor’s assets. China On transferred shares to the placees without first requiring payment and executed a purported instruction by a third party without verifying it with the Vendor. The SFC viewed this as gross negligence and a breach of the Code of Conduct. The fine takes into account the lack of evidence of dishonesty and China On’s otherwise clean disciplinary record, but it aims to send a deterrent message that grossly negligent or reckless conduct will not be tolerated by the SFC.
resource: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR50