The Monetary Authority Suspends Chu Lai Kwan for Breaching the Code of Conduct and Internal Policy of Her Employer

The Monetary Authority (MA) has suspended all the particulars of Ms Chu Lai Kwan ("Ms Chu") from the register maintained by the MA under section 20 of the Banking Ordinance for one month from 5 June 2007 to 4 July 2007 (both dates inclusive) for her concealment of her securities trading from her employer*.

The suspension follows an inquiry in which the MA found that Ms Chu conducted joint securities trading with her colleague through the accounts of a client and another colleague with her employer during the period from 2 April 2003 to 30 April 2004. Ms Chu failed to declare her beneficial interests in these two accounts in accordance with the requirements of the staff dealing policy of her employer.

The MA concluded that Ms Chu purposely concealed from her employer her securities trading activities by not declaring her beneficial interests in those accounts. This was a dishonest act and Ms Chu therefore breached the Securities and Futures Commission (SFC) Code of Conduct and was guilty of misconduct.

In determining the penalty, the MA has taken into account all the circumstances of the case including the fact that:

• Ms Chu has a clean disciplinary record with the Hong Kong Monetary Authority (HKMA) and the SFC;
• There is no evidence that her securities trading activities concealed from her employer were prejudicial to interest of any clients;
• Ms Chu took the initiative to report her concealed securities trading activities to the Internal Audit of her employer during its investigation of a complaint; and
• Ms Chu was co-operative with the HKMA investigation team.

Mr Raymond Li, the Executive Director of the HKMA responsible for the enforcement function, said, "It is unacceptable for relevant individuals to breach their employers' staff dealing policies by concealing their personal securities trading activities from their employer, thereby depriving their employer of the right to exercise compliance control over those activities to detect irregularities. Such dishonest acts will not be tolerated."

* Ms Chu is a relevant individual engaged by Hang Seng Bank Limited in respect of Type 1 (dealing in securities), Type 4 (advising on securities) and Type 7 (providing automated trading services) regulated activities.

For further enquiries please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Hing-Fung Wong, Officer (Press), at 2878 1802

Hong Kong Monetary Authority
4 June 2007