LAX CONTROLS: The FSC said the firm failed to catch a trader secretly managing 12 clients’ funds, but did not agree that it set unreasonable demands on employees

Taipei Times
Date: Dec 25, 2020
0By: Kao Shih-ching / Staff reporter

The Financial Supervisory Commission (FSC) yesterday fined KGI Securities Ltd (凱基證券) NT$3.36 million (US$117,676) for poor internal control and lax management after a stock broker, surnamed Lai (賴), allegedly committed suicide in August in Taipei due to huge investment losses.

Lai’s death has sparked public concern over KGI Securities’ management, with his family accusing the company of putting undue pressure on its brokers, including encouraging Lai to illegally trade futures for his clients, which resulted in huge investment losses.

The commission announced the penalty after releasing its long-awaited investigative report on the incident, three-and-a-half months after it launched a probe.

Lai had secretly managed at least 12 clients’ funds with their approval since 2018, helping operate their discretionary accounts, which means he decided which futures to buy or sell without their orders, an illegal behavior for a broker, Securities and Futures Bureau Deputy Director Kuo Chia-chun (郭佳君) told a news conference in New Taipei City.   [FULL  STORY]