Resources

Billy is a sales manager of a securities company.  On one occasion, he recommends his client, Joe, to purchase the stocks of Earth Bank at the price of $10 per share because of its favourable development.   Joe thus places an order with Billy to purchase 150,000 shares.   As Billy also wants to buy the stocks of Earth Bank, he therefore aggregates his own order of 50,000 shares with that of Joe’s.

Because of the huge demand of Earth Bank's stocks in the market, Billy can only acquire 150,000 shares.   He then allocates the stocks in the proportion of Joe's order and his own.   As a result, 37,500 shares are allocated into his own account and the remaining 112,500 shares into Joe’s account.

Eddie is a director of a financial group which engages in businesses of securities and futures, asset management and corporate finance.  Recently, his company is appointed as an underwriter of a placement deal for Small World Corporation.

Because the share price offered is not particularly attractive, Eddie is a little worried that the stocks of Small World Corporation cannot be fully subscribed by investors in the market and this will force his company to acquire the remaining portion. Therefore, he instructs Jacob, a fund manager in the asset management division, to purchase a substantial amount of the stocks for his discretionary clients.

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.