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

On March 19, 2026, the Securities and Futures Commission ("SFC") issued a prohibition order against Mr Kuo Che-jung, a former responsible officer of Yuanta Securities (Hong Kong) Company Limited, preventing industry re-entry for four and a half years from 19 March 2026 to 18 September 2030. A penalty of $1 million was imposed for conducting matched trades in Hang Seng Index options and maintaining secret accounts.

Investigation Findings on Matched Trading

Between 2 July 2020 and 24 November 2020, the SFC investigation revealed that Kuo executed 25 matched trades in Hang Seng Index options while acting as a proprietary trader for Yuanta. These trades were coordinated between Yuanta’s proprietary account and a securities account held in his wife’s name at a separate brokerage. The execution prices favored his wife’s account to Yuanta’s detriment, creating a notional benefit at the firm’s expense. Furthermore, trading outside prevailing bid-ask spreads interfered with price formation impartiality, compromising Yuanta’s interests and undermining market integrity.

Concealment of Interests and Policy Violations

The SFC found that Kuo concealed his beneficial interests in his wife’s account and his ownership of two securities trading accounts at another brokerage, violating Yuanta’s staff dealing policies. While maintaining these accounts in secret, Kuo repeatedly submitted false declarations to Yuanta, asserting that he held no other securities trading accounts beyond the approved one. This conduct circumvented compliance monitoring of his personal trading activities.

Regulatory Assessment and Sanction Considerations

The SFC determined that Kuo’s conduct was serious and dishonest, raising significant concerns regarding his fitness and properness for licensing. In deciding the sanction, the SFC considered all relevant circumstances, including Kuo’s cooperation in resolving the regulatory concerns and his otherwise clean disciplinary record.

Licensing History and Current Status

Kuo was licensed under the Securities and Futures Ordinance as a licensed representative for Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), and Type 9 (asset management) regulated activities across various periods between 2005 and 2025. He was approved to act as a responsible officer for Yuanta regarding Type 1 and Type 2 activities from 21 November 2019 to 23 June 2025. Currently, Kuo is not licensed by the SFC.

Definition of Matched Trades

Matched trades occur when a person offers to sell securities at a price substantially identical to an offer to buy substantially the same number of securities, creating a false appearance of trading activity that distorts supply and demand. In this case, Kuo ultimately benefitted by arranging for trading proceeds from his wife’s account to be transferred to his personal account.