The Securities and Futures Commission (SFC) of Hong Kong has imposed a lifetime ban on Xie Yangxiong, the Director of Wansom Asset Management (WAML) and Wansom Securities (WSL).

The decision follows an extensive investigation that found Yangxiong at the core of false and misleading financial information submitted during the licensing applications for the firms.

SFC Bans Xie Yangxiong for Life

As the lone figure controlling both companies' bank accounts, Yangxiong manipulated the firms' financial data by artificially meeting liquid capital requirements during licensing. The funds were promptly withdrawn after the applications were submitted. That move would have led to a denial of both licenses if the money had not been temporarily deposited.

These manipulative actions were initiated during the licensing applications for WAML and WSL, in July and August of 2018, respectively. After acquiring the licenses, the mismanagement of funds continued, with Yangxiong removing funds from the companies for personal use.

This resulted in the companies' liquid capital deficits varying from $1.58 million to $3 million from July to October 2018. The SFC stated that WAML's and WSL's misconduct resulted directly from the director's actions.

SFC Wants to Send a Strong Message

In determining the lifetime ban, the SFC considered various factors. Yangxiong's integrity was found to be compromised, plus the regulator aimed to send a strong message to the industry about its zero-tolerance policy towards attempts to mislead the commission.

On the other hand, since WAML and WSL had not conducted any regulated activities prior to their license suspensions, and no clients were affected by their regulatory failures, these factors were considered less severe. Additionally, the director's clean disciplinary record before this incident was taken into account.

This case reminds industry participants about the SFC's commitment to maintain market integrity and its readiness to take decisive action against any financial abuse that undermines that integrity.

In the past, the regulator has used similar penalties. In 2021, the SFC took action against IDS Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term HK Limited's two Co-CEOs, Chung Wooman and Ki Bonggan, and banned them for life from re-entering the financial industry.

In a recent event in March, the SFC banned Philip John Shaw, a former irresponsible officer, Board Member and Head of Pan-Asia Execution Services of Citigroup Global Markets Asia Limited (CGMAL), for severe regulatory breaches. According to the regulator's statement, Shaw cannot re-enter the financial industry for the next ten years.

Also, the securities regulator in Hong Kong has pressed charges against 24 individuals for engaging in market manipulation. These charges come after a thorough investigation conducted by the SFC and the Hong Kong Police Force, targeting suspected money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term cases.