Case Studies

Our case studies contain analysis and discussion points for users to better understand the legal provisions. They also provide suggestions on how to prevent corruption, fraud and malpractices.

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All Areas of Concern

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All Areas of Concern

Raymond  is  a  fund  manager  who  manages  the  provident  funds  in  a medium-sized asset management company.  His wife, Jenny, is an account executive in a brokerage firm.   Recently, Jenny has been under pressure from her employer to generate more business.   Due to the keen competition within the industry, she is unable to meet the quota for finding new clients.   In order to help his wife, Raymond makes use of his official position to place business with her without observing his company policy on the selection of external brokers.

Jackson is a corporate financier.  On one occasion, he leads a team to arrange the takeover of Good Industrial by Frontline Group through the acquisition of 50% of its shares.   Although Jackson is holding a substantial quantity of stocks of Good Industrial, he does not disclose the situation to his company. Finally, Jackson makes handsome gains from his own Good Industrial’s stocks due to the success of the takeover.

Donald is an account manager of a brokerage company and has been licensed by the Securities and Futures Commission (SFC) to deal in securities. Since his company is keen to develop the futures brokerage business and needs more manpower to handle client orders, Donald is instructed by his supervisor to apply for the related license.  In fact, his company never considers whether Donald possesses the required qualifications and experience to be so licensed.


One day, a regular customer, Gordon, seeks Donald’s advice on index options.   Although Donald has yet to obtain the license, he is confident of providing advice to Gordon because, in preparing for the license application, he obtains plenty of reference material from his colleagues in the futures brokerage division.   He even accepts the order from Gordon to buy in index options contracts.

Martin manages the research department of a securities company.   On one business encounter, he meets Johnny who is the CEO of a listed company which engages in infrastructure development throughout Asia.   Johnny tells Martin that his company is in the final stage of obtaining the bid for the building of a highway in a Southeast Asian country and the terms offered by the government concerned are very attractive.   Johnny is optimistic that his company will make a huge profit from the project.   Having arrived back at his office, Martin issues a research report stating that Johnny’s company will obtain the profitable construction contract and he recommends the purchase of its stocks.

Doris  is  an  account  manager  of  a  brokerage  company.    One  day,  a white-collar worker named Kelvin steps into her company with a request to open an account to deal in securities.   He tells Doris that, as he plans to study abroad next year, he wants his savings of one hundred thousand dollars to have a good return so that he can have enough money to reach his goal early.   He asks Doris in what products he should invest.  Doris persuades Kelvin to open a margin account to buy second-line stocks.   However, Doris doesn’t try to explain to Kelvin the difference between margin accounts and cash accounts, nor the risks involved in the former.


Hearing that the Hang Seng Index is dropping rapidly soon after the opening of the stock market, Kelvin calls Doris and places the order to immediately sell all the shares in his account.   Because Doris also receives many other "sell" orders from her large clients that morning, she sets aside Kelvin’s order and busily handles their transactions.   When Doris has time to eventually execute Kelvin’s order, Kelvin has already suffered a great financial loss.

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