Mr Ang Wing Fung, the former chairman of W. Falcon Asset Management (Asia) Ltd (Falcon), and its former chief financial officer and company secretary Mr Chan Kam Wah have been banned from re-entering the industry for life and three years, respectively by the Securities and Futures Commission (SFC). This ban is in connection with their roles in window-dressing the liquid capital of Falcon.

The disciplinary action against Ang and Chan follows the SFC’s revocation of the licence of Falcon in February 2019 for window-dressing its liquid capital and other failures. The SFC found that Falcon provided false or misleading information in its licence application and financial returns between June 2014 and June 2017 to SFC.  Ang also failed to notify the SFC of Falcon’s insufficient liquid capital and his resignation as a director.

Ang was the mastermind of the window-dressing scheme and its operation was facilitated by Chan. Under Ang’s scheme, Falcon’s month-end liquid capital was window-dressed by including in its liquid capital computation the amount of cheques he drew on certain bank accounts, which were subsequently dishonoured. Had the amount of these cheques issued by Ang been excluded, Falcon would have been denied a licence to carry on regulated activities due to a liquid capital deficit at the time of its licence application and at each of the month-ends over a three-year period.

As the person in charge of accounting, Chan was fully aware of the true financial condition of Falcon.  He was also aware that cheques signed by Ang would certainly be dishonoured upon presentation due to insufficient funds in the bank accounts on which they were drawn and closure of some of these accounts. Nonetheless, he continued to take part in the window-dressing scheme to disguise Falcon’s failure to maintain sufficient capital as required for as long as possible.

Subsequently, Ang resigned from Falcon on 23 October 2017, but failed to provide the SFC with written notification of such resignation within seven business days as required.

While deciding the penalty, the SFC took into account all relevant circumstances, including:

  • the honesty and integrity of Ang and Chan have been impugned;
  • their egregious and serious misconduct caused Falcon to damage investors’ and the public’s confidence in market integrity;
  • their otherwise clean disciplinary record; and

the need to prohibit them from the industry in order to protect the investing public.

 

Date: 17 Dec 2019

Argus Global specializes in regulatory compliance. We can help you determine if your company is up to date with the latest regulations with compliance reviews, and we offer as well ongoing support for all your compliance needs.

 

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