Hong Kong’s securities regulator has reprimanded Ping An of China Securities (Hong Kong) and fined it HK$6 million (US$774,189) over what it called “serious internal control deficiencies” for anti-money laundering and other matters at the company.
A Securities and Futures Commission (SFC) investigation found that between August 1 2010 and April 2011 Ping An failed to do the following:
- Establish an anti-money laundering internal controls procedure
- Actively identify and report suspicious transactions in a timely manner
- Provide anti-money laundering training to its staff
- Establish and follow appropriate and effective procedures to protect client assets in effecting payments
Ping An did not effectively communicate and enforce its internal policies in relation to its employees, according to the investigation.
“This was a case of serious internal control failures,” said Mark Steward, the SFC’s executive director of enforcement. “Ping An has reacted properly and, in doing so, has saved itself from a harsher outcome. This case should send a clear warning to the industry that cavalier attitudes have no place in our market,” he said.
In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including Ping An’s otherwise clean record and steps taken by the company to remedy its internal control deficiencies.
The steps included the appointing a new management team and a new chief executive officer, and Ping An’s its agreement to engage an independent reviewer to confirm the new procedures have been implemented and are working properly.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.