Hong Kong permanently suspends Wansom’s Xie Yangxiong
Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has banned the owner of two financial firms from re-entering the industry for life after he was convicted of multiple violations.
The SFC said that Xie Yangxiong, the director of Wansom Asset Management and Wansom Securities, was disbarred for providing misleading information, as well as his failure to maintain sufficient liquid capital and notify the regulator of the deficits.
The watchdog found that Xie, who held sole control and access to the bank accounts of WAML and WSL, was directly responsible for submitting inaccurate financial information to support their license applications in 2018. Additionally, he failed to notify the SFC of their insufficient liquid capital after the licenses were granted.
Specifically, Xie deposited funds into his companies’ bank accounts to fulfill the liquid capital requirements. Then he provided this false information to an external auditor who assisted with the license applications, knowing that it would be presented to the SFC.
Subsequently, Xie withdrew the same funds from the bank accounts, which left both WAML and WSL ineligible for licenses as they failed to meet the liquid capital criteria.
According to the complaint, the owner proceeded to withdraw more funds for personal use, resulting in deficits ranging from $1.58 million to $3 million between July and October 2018. Moreover, Xie didn’t promptly inform the SFC of his firms’ capital shortage within the stipulated one business day.
“In the circumstances, had the withdrawn funds been excluded from the liquid capital calculation, both WAML and WSL would have been denied licences to carry on regulated activities due to their inability to fulfil the liquid capital requirements applicable to them at the time of their licence applications,” the regulator further states.
The SFC wants to send a strong message to deter others from committing similar offenses, the regulator said in today’s statement.
Earlier this year, the SFC charged 24 suspects of market manipulation in a joint operation with the local police. The defendants include a leader of what the authorities describe as “a sophisticated syndicate operating ramp-and-dump schemes through a complex cross-shareholding network of Hong Kong-listed companies.”
The SFC added that the fraudulent scheme, which yielded $191 million in illegal gains, targeted the shares of six publicly-listed companies.