SFC reprimands and fines Victory Securities Company Limited $1.7 million and suspends responsible officer

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24 Jul 2026 The Securities and Futures Commission (SFC) has reprimanded and fined Victory Securities Company Limited (Victory) $1.7 million for regulatory breaches in the handling of a client account (Note 1).

The SFC has also suspended the licence of Mr Stephen Chiu Che Leung, a responsible officer (RO) and manager-in-charge (MIC) of Victory, for three months from 22 July 2026 to 21 October 2026 (Note 2).

The breaches were uncovered while the SFC was conducting a separate investigation into a suspected ramp-and-dump scheme.

The SFC found that on 29 October 2019, a client opened an account at Victory, expressing his intention to sell securities held with another brokerage through Victory. The client placed orders with Victory to sell shares on two occasions shortly after opening the account, and provided statements purportedly issued by other brokerages as proof of his holding in those shares.

Despite various red flags which should have called for closer scrutiny of the information provided by the client, including that the client’s purported ownership of the shares was incommensurate with his financial profile declared in the account opening documents, Victory did not make adequate enquiry with the client or seek satisfactory answers to the red flags before executing the client’s orders.

Furthermore, subsequent information suggested that the client might have provided false documents to Victory to facilitate one of the transactions, but Victory did not report the client’s fraudulent or deceptive conduct to the SFC.

The SFC considers that Victory’s handling of the client’s account fell short of the standards expected of it 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) (Notes 3 and 4).

The SFC is of the view that Victory’s failures were attributable to Chiu’s neglect in discharging his duties as its RO and a member of its senior management.

In determining the sanctions, the SFC has taken into account all the relevant circumstances of the case, including:

this was an isolated incident;

there is no evidence of systematic weaknesses in respect of Victory’s internal controls;

Victory has since enhanced its internal policies and procedures, and implemented mandatory staff training to prevent the occurrence of similar incidents;

Victory and Chiu’s cooperation with the SFC in reaching a resolution of the matter; and

Chiu has an otherwise clean disciplinary record with the SFC.

End

Notes:

Victory is licensed under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 9 (asset management) regulated activities.

Chiu is accredited to Victory and has been approved to act as its RO for Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 9 (asset management) regulated activities since 13 December 2005. Further, he was Victory’s MIC of the following core functions: (a) Key Business Line, Operational Control and Review, Overall Management Oversight (OMO) between 13 July 2017 and 18 February 2022; and (b) Compliance and Anti-Money Laundering and Counter-Terrorist Financing between 1 April 2020 and 18 February 2022. He has resumed his role as MIC of OMO from 1 October 2024.

Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

Please refer to the Statement of Disciplinary Action for the relevant regulatory requirements.

A copy of the Statement of Disciplinary Action is available on the SFC website Page last updated 24 Jul 2026