The Securities and Futures Commission (SFC) has reprimanded UBS’ client adviser Yue Siying and fined her $400,000 for negligence in handling a client’s trade orders.
In December 2009, a client of UBS AG wanted to sell his shares in a stock to an identified buyer at agreed amounts and prices through manual cross trades. Yue, a client adviser at UBS AG, did not know how to carry out cross trades. Instead of placing cross trades as initially instructed by the client, Yue and her assistant coordinated with the buyer to conduct a series of on-exchange matched trades between 2 and 8 December 2009 (Notes 2 & 3).
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The SFC found that, in handling the client’s orders on 2 and 3 December 2009, Yue failed to:
- make reasonable efforts to clarify and to ascertain the appropriate way to execute her client’s trading instructions when she was unsure about them;
- make diligent enquiries on the relevant transactions to ascertain the client’s intention;
- report the matter to the Compliance Department of UBS AG; and
- refrain from or causing her assistant to refrain from acting on the client’s instructions before she was satisfied that the orders and their execution did not affect the best interests of the integrity of the market.
The SFC considers that Yue’s failures called into question her fitness and properness as a registered person.
In deciding the disciplinary sanction, the SFC took into account that:
- Yue did not make any personal benefit out of the transactions in question;
- there is insufficient evidence to prove to the requisite standard that the matched trades were carried out with manipulative intent;
- the matched trades had minimal impact on the nominal price of the stock; and
- Yue has an otherwise clean disciplinary record with the SFC.
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