ASIC Continues: GAIN Capital Employee Banned From Financial Services

He had extensive telephone conversations with both clients regarding their trading and coached them on what to say if questioned by ASIC.

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Australian financial regulator ASIC has made an announcement earlier today that Mr Shun Yuen Ken Li was permanently banned from providing any kind of financial services, now and in the future.

The reason for the permanent ban, after Li pleaded guilty, were two counts of dishonestly using his position being an employee of GAIN Capital Australia Pty Ltd. The charges stated that Mr Li acted with the full intention of gaining an advantage for two of his clients, which is contrary to section 184(2)(a) of the Corporations Act 2001. He was sentenced to community service work of 350 hours in the Downing Centre Local Court.

According to the charge against him, Mr Li used his position as an employee of GAIN Capital for placing orders in the name of two of his clients. Those orders resulted in profits for both clients in the total amount of $72,550 which was later recovered in full by GAIN Capital.

If we recall the previous incident with banning where ASIC banned Sean Nofal for falling short of providing the standard that would be expected of a competent financial services provider, it is clear that ASIC does not sleep lately.

According to the case, ASIC found that Nofal’s conduct had the potential to contravene the financial services laws which made ASIC believe that this was an inevitable outcome in the future also. Mr Nofal supposedly did not possess enough judgment, competence or skill expected of someone in the position of a responsible executive.

ASIC also noted that Mr Nofal was completely aware of suspicious behavior from two clients of State One between the period of early 2011 and early 2012. He had extensive telephone conversations with both clients regarding their trading and coached them on what to say if questioned by ASIC.

Seeing that Mr Nofal failed to report these issues it was clear why ASIC decided to penalize him.

As can be seen from the cases that ASIC has been leading, they seem to be very determined to impose heavy penalties to those who deliberately fail to follow the legal framework that they are obligated to follow. We are also sure that these will not be the last cases that ASCI deals with.

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