Hong Kong securities watchdog has banned Patrick Lui Pak-tong from re-entering the industry for life and fined him HK$17.43 million for misconduct.
That is equivalent to the profit the former licensed representative of Thunder Capital gained from the misconduct, the Securities and Futures Commission said.
The SFC found that, between September 2017 and June 2020, Lui, as Thunder’s investment analyst, caused a segregated portfolio of a fund managed by Thunder to extend five unsecured loans totalling HK$22.5 million to a company under his control.
In this connection, he recommended to Thunder’s Investment Committee that the fund extended the loans to the company without disclosing the conflicts of interest arising from his involvement and failed to ensure fair treatment of the fund and its investors, the SFC said.
The SFC’s investigation also revealed that Lui had, in fact, established Thunder, the fund, and the company with his associates, and all three entities were effectively under his control.
Lui subsequently caused a substantial portion of the loan proceeds that the company received to be transferred to himself or persons connected with him, including his wife.
In the end, the fund only received HK$5.07 million in interest payments from the Company, while Lui and his connected persons pocketed HK$17.43 million, the SFC said.
The SFC considers Lui’s conduct to be wilful and dishonest, thereby calling into question his fitness and properness to be licensed. His conduct also constitutes breaches of the Code of Conduct and the Fund Manager Code of Conduct.
