On Feb. 18, HK SFC fined Guosen securities $15mn for AML breach.
- Guosen Securities (HK) broker failed to comply with AML/CFT rules, in handling
third party fund deposits, processed 10,000 third-party deposits for $5bn total.
- Clients received third-party deposits that were unequal to their financial profiles.
- Third-party deposits withdrawn soon after funds receipt, without use for trading.
- Some third parties with no client relationship made deposits on purported behalf.
- No system to identify and monitor third-party deposits into client bank accounts.
- Did not verify identity of depositors, relationship with clients, reasons for deposit.
- Employees raised some of the internal control deficiencies to senior management
who chose not to take steps, to ensure AML/CFT internal controls were effective.
- Firm did not submit suspicious transaction reports to the JFIU in a timely manner.