The Securities and Futures Commission (SFC) has prohibited Mr Benedict Ku Ka Tat, a former employee of The Pride Fund Management Limited, from re-entering the industry for one year from 18 November 2016 to 17 November 2017 and fined him $150,000 for failings relating to his sale of a fund to a client.
An SFC investigation revealed that when Ku recommended a fund to a client in 2008, he failed to provide her with material information on the commission she would be charged for investing in the fund and his personal benefit from the commission.
Unbeknown to the client, Ku received $93,600 as commission, equivalent to 12% of the client’s intended investment of $780,000.
The SFC has also found that Ku failed to ensure that the fund he recommended was suitable for the client in view of her personal circumstances. Ku failed to conduct proper “know your client” process, including seeking adequate information about the client’s financial situation, investment experience, investment objectives and risk tolerance.
In deciding the penalty, the SFC took into account all relevant circumstances, including that this was a one-off incident.