HK SFC Broker HK$15mn for AML

• 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.

Allegations

• 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• Third-party deposits withdrawn soon after funds receipt, without use for trading.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.

Reporting

• 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.