SFC reprimands and fines Victory Securities Company Limited $1.7 million and suspends its responsible officer for regulatory breaches

Sanctions Imposed by the Securities and Futures Commissi

On July 24, 2026, the Securities and Futures Commission ("SFC") has issued a reprimand and imposed a fine of $1.7 million upon Victory Securities Company Limited (Victory) regarding regulatory breaches associated with client account handling. Concurrently, the SFC has suspended the licence of Mr Stephen Chiu Che Leung, who serves as a Responsible Officer ("RO") and Manager-in-Charge ("MIC") for Victory, for a duration of three months commencing 22 July 2026 and concluding on 21 October 2026.

Facts Underlying the Regulatory Breach

These violations were identified during a separate SFC investigation into a suspected ramp-and-dump scheme. On 29 October 2019, a client opened an account with Victory intending to sell securities held at another brokerage. The client subsequently placed sell orders on two occasions shortly after account opening, submitting statements purportedly issued by other brokerages as proof of share holdings.

Failures in Client Due Diligence and Reporti

Despite significant red flags, including a discrepancy between the client’s declared financial profile and their purported share ownership, Victory failed to conduct adequate enquiries or obtain satisfactory explanations before executing orders. Furthermore, despite subsequent indications that the client may have submitted false documents to facilitate a transaction, Victory did not report this potentially fraudulent or deceptive conduct to the SFC.

Regulatory Obligations and Individual Responsibili

The SFC determined that Victory’s conduct fell below the standards required under the Code of Conduct, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, and the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations). The Commission attributed these failures to Mr Chiu’s neglect in fulfilling his duties as both the Responsible Officer and a member of senior management.

Mitigating Circumstances Consider

In determining sanctions, the SFC considered several mitigating factors, noting that the incident was isolated with no evidence of systematic weaknesses in Victory’s internal controls. Additionally, Victory has since enhanced internal policies and procedures while implementing mandatory staff training. The Commission also acknowledged the cooperation of both Victory and Mr Chiu in resolving the matter, as well as Mr Chiu’s otherwise clean disciplinary record with the SFC.

Regulatory Licensing and Accreditation Detai

Victory holds a licence under the Securities and Futures Ordinance to conduct Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), and Type 9 (asset management) regulated activities. Mr Chiu has been accredited to Victory since 13 December 2005 as an RO for these activities. He previously served as MIC for Key Business Line, Operational Control and Review, Overall Management Oversight ("OMO") from 13 July 2017 to 18 February 2022, and for Compliance and Anti-Money Laundering and Counter-Terrorist Financing from 1 April 2020 to 18 February 2022, having resumed his OMO MIC role from 1 October 2024. Relevant regulatory requirements are detailed in the Statement of Disciplinary Action available on the SFC website.