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Case Studies
Offering and accepting an advantage both constituting an offence
Peter was a dealing director of a brokerage company. Due to the favourable performance in the local property market, the Hang Seng Index was driven up and many of his clients placed orders to buy blue-chip stocks. In order to deal with the clients’ orders expeditiously, Peter decided to direct a portion of the business to an external broker.
Without taking the service quality into consideration, Peter offered the business to his golfing partner, David. In fact, David charged a much higher brokerage rate than other brokers. One day, in a prestigious country club, David thanked Peter for giving him the business. He told Peter that he was now on the executive committee of the country club and was able to secure for Peter one of the highly sought after memberships. David even implied that if Peter continued to provide him with business in the future, Peter would have more advantages. In response, Peter accepted the offer gratefully.
Case Analysis
Peter violated the Codes of Conduct[1] issued by Securities and Futures Commission by abusing his official position to refer business to David in return for accepting an advantage in the form of a country club membership. Peter failed to fulfil his obligation to protect the interests of his employer and clients as David might not be the broker who provided the best service to his company, not to mention the excessive brokerage fee charged.
If Peter had not obtained prior permission from his employer to accept the advantage, both Peter and David breached Section 9 of the Prevention of Bribery Ordinance (POBO). Peter committed an offence of accepting a bribe and David committed an offence of offering a bribe.
[1] Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Corporate Finance Adviser Code of Conduct and the Fund Manager Code of Conduct.