Hong Kong's Securities and Futures Commission (SFC) has banned former BNP Paribas adviser Kim Bum Suk from re-entering the industry for 27 months, from 29 March 2022 to 28 June 2024, over running a client account discretionarily without obtaining written authorisation.
The disciplinary action came after an SFC investigation following a self-report from BNP and referral of findings from the Hong Kong Monetary Authority.
Kim was a relevant individual engaged by BNP Paribas Wealth Management and BNP Paribas from 4 December 2014 to 30 September 2016 and from 30 September 2016 to 29 March 2018 respectively, to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance.
Kim is currently not licensed by the SFC or registered with HKMA.
The SFC found that from March 2015 to August 2017, Kim operated a client account discretionarily without obtaining written authorization under the guise of pre-signed client instruction forms.
To this end, he misled BNP by creating a false appearance that the instructions for buying and selling investment products originated from the client who was arranged to pre-sign blank client instruction forms and risk mismatch acknowledgement letters when in fact he was operating the account discretionarily.
He adopted a similar practice with three other clients and asked them to pre-sign blank client instruction forms so that he could place trades for their accounts without having to inform them in advance.
He also deceived BNP with false call reports that he had met or contacted the clients to give them investment advice and/or take order instructions from them when in fact he had not.
In doing so, Kim not only breached the regulatory provisions on the authorization and operation of discretionary accounts and suitability requirements under the Code of Conduct, but also circumvented BNP's policies and procedures in relation to discretionary accounts and suitability.
The SFC further said it "considers that Kim is not fit and proper to be a regulated person as his conduct was deceptive and dishonest, and casts doubt on his character and reliability as well as his ability to carry on regulated activities competently and honestly.
"In deciding the sanction, the SFC took into account all relevant circumstances, including Kim's misconduct and breaches of BNP's policies lasted for almost two and a half years, his admission of using pre-signed documents and causing the production of false call reports, as well as his otherwise clean disciplinary record."
