SFC bans Kuo Che-jung for four and a half years and fines him $1 million

The Securities and Futures Commission (SFC) has prohibited Mr Kuo Che-jung, a former responsible officer of Yuanta Securities (Hong Kong) Company Limited (Yuanta), from re-entering the industry for four and a half years from 19 March 2026 to 18 September 2030 and fined him $1 million for conducting matched trades in Hang Seng Index options and operating secret accounts (Notes 1 and 2).

The disciplinary action follows an SFC investigation which found that, between 2 July 2020 and 24 November 2020, Kuo, while acting as a proprietary trader for Yuanta, executed 25 matched trades in Hang Seng Index options in a coordinated trading pattern between Yuanta’s proprietary trading account and a securities trading account held in his wife’s name at another brokerage. The matched trades were executed at prices favourable to Kuo’s wife’s account but disadvantageous to Yuanta’s account, resulting in a notional benefit for his wife’s account at Yuanta’s expense. 

Moreover, Kuo’s execution of multiple matched trades at prices outside the prevailing bid-ask spreads could interfere with the impartiality and objectivity of normal price formation. Kuo’s actions therefore not only compromised Yuanta’s interests for the benefit of his wife but also potentially undermined market integrity (Note 3).

In the same investigation, the SFC found that Kuo concealed from Yuanta his beneficial interests in his wife’s account, his ownership of two securities trading accounts at another brokerage, and his personal trading activities conducted in these accounts, in violation of Yuanta’s staff dealing policies. While keeping these accounts secret, Kuo repeatedly submitted false declarations to Yuanta, stating that, apart from an account approved by Yuanta, he did not maintain any other securities trading accounts in his name or under his beneficial ownership or influence. As a result, Kuo’s conduct circumvented Yuanta’s staff dealing policies and prevented it from monitoring his personal trading activities.

The SFC is of the view that Kuo’s conduct was serious and dishonest, thereby raising concerns about his fitness and properness to be licensed. In deciding the sanction, the SFC has taken into account all relevant circumstances, including Kuo’s cooperation in resolving the SFC’s concerns and his otherwise clean disciplinary record.

End

Notes: 

1. Kuo was licensed under the Securities and Futures Ordinance and was accredited to Yuanta as its licensed representative in respect of: (i) Type 1 (dealing in securities) regulated activity between 28 April 2005 and 25 November 2008 and between 23 November 2009 and 21 November 2019; (ii) Type 2 (dealing in futures contracts) regulated activity between 22 September 2015 and 21 November 2019; (iii) Type 4 (advising on securities) regulated activity between 28 April 2005 and 25 November 2008 and between 23 November 2009 and 23 June 2025; and (iv) Type 9 (asset management) regulated activity between 21 January 2021 and 23 June 2025. Kuo was also approved to act as a responsible officer of Yuanta in respect of Type 1 and Type 2 regulated activities from 21 November 2019 to 23 June 2025. Kuo is currently not licensed by the SFC.

2. Matched trades refer to transactions where a person offers to sell securities at a price that is substantially the same as the price at which he has made or proposes to make (or he knows an associate of his has made or proposes to make) an offer to buy substantially the same number of securities, and vice versa. Matched trades can create a false or misleading appearance of trading activity, distorting the actual supply and demand of the shares in question.

3. Kuo ultimately benefitted from the matched trades by arranging for a portion of the trading proceeds in his wife’s account to be transferred to his personal account.