Summary: The Securities and Futures Commission ("SFC") revoked the license of Nerico Brothers Limited ("NBL") and banned its director, Jerff Lee Cheuk Fung, for life due to serious misconduct. NBL misappropriated over $200 million of clients' funds, transferring them to a Cayman fund without authorization and using fabricated documents to conceal the scheme. The SFC found NBL's explanations to be false and held Lee responsible for the misuse and misappropriation. Lee also provided false information to the SFC. NBL was wound up in 2022.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
SFO, s. 300: Fraudulent & Deceptive Conduct Provisions to Combat Insider Dealing and Other Misconduct
The Court of Appeal decision in Securities and Futures Commission v. Young Bik Fung confirmed that insider dealing as well as other market misconduct could be r
D&O Insurance in Hong Kong: What To Know In The Event Of SFC Enforcement Action
Enforcement action by the Securities and Futures Commission (“SFC”) against officers of companies listed on the Stock Exchange of Hong Kong is becoming increasi
SPOTLIGHT ON
FAMILY OFFICES
On August 28, 2025, the Securities and Futures Commission ("SFC") revoked the license of Nerico Brothers Limited ("NBL") and banned its director, Jerff Lee Cheuk Fung, from all regulated activities for life. The SFC found that between June 2020 and January 2021, NBL misused client funds totaling over US$68 million on six occasions without the client's knowledge or authorization, retaining the profits for itself and returning only the subscription principals. The misuse was part of a broader scheme orchestrated by Neo Ng Yu and his associates, resulting in the misappropriation of approximately US$154 million since January 2021.
NBL presented contradictory narratives and fabricated documents during the SFC's inquiry. Initially, NBL claimed that funds were transferred to acquire 'liquidity provider units' from a sub-fund. Later, NBL changed its explanation, claiming the funds were used to acquire 'liquidity provider units' from another fund. Both narratives were false, as no such units were issued, and funds were misappropriated. The fabricated documents used to support these false claims were identified by the SFC.
The SFC concluded that Lee, a director of NBL, was the driving force behind the misuse and misappropriation of client funds. Lee also provided false or misleading answers during interviews with the SFC, further exacerbating the misconduct. The SFC deemed NBL’s and Lee's actions as severe, undermining investor and public trust in market integrity. The High Court of Hong Kong ordered the winding up of NBL on 3 May 2022. Lee, as a non-licensed director, was considered a regulated person under the Securities and Futures Ordinance ("SFO").
View the full article:Source
