The Hong Kong Securities & Futures Commission (SFC) has fined HANG SENG BANK USD$ 8.7m, for influencing bank clients into making "frequent and excessive transactions" in the purchase and sale of securities by the bank on their behalf, between 2014 and 2023. For those readers not familiar with securities laws, that is an illegal technique known as CHURNING, where the broker convinces the client to make multiple transactions, which may not benefit him, or be part of any rational investment objectives, but which generates lucrative commissions for the broker. It is, of course, also illegal in most jurisdictions, including the United States. As a young lawyer representing brokerage houses in Miami, I saw a number of Churning cases, where the stockbroker convinced the investor to engage in many transactions, where there was obviously no investment strategy, but were intended to line the pockets of the broker with commission payments; This is what Hang Seng is being fined millions for.
Hang Seng has been the subject of a number of articles on our financial crime blog recently; Let us draw your attention to IS HSBC-OWNED HANG SENG BANK LIABLE ...? https://rijock.blogspot.com/2024/08/philippe-martinez-is-officer-at-msr.html The bank reportedly received repeated payments made by applicants for Citizenship by Investment (CBI/CIP) who paid illegally-discounted fees for passports, which it later funnelled to NATIONAL BANK OF ST. KITTS-NEVIS-ANGUILLA and BANK OF SAINT LUCIA, which has been alleged to constitute money laundering on a grand scale.
See also: https://rijock.blogspot.com/2024/07/illegally-discounted-cbi-passports.html
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