GEO Securities Limited fined $6.3m for selling unlisted bonds
The company also failed to disclose its commission for the bond sales.
Investment services firm GEO Securities Limited was fined $6.3m by the Securities and Futures Commision for selling unlisted bonds to investors.
The SFC’s investigation revealed that GEO introduced 36 clients directly to four listed companies to subscribe for their unlisted bonds totalling $108m between 28 October 2014 and 16 November 2015. GEO also provided discretionary account management services to eight clients in return for an annual management fee between 1 July 2014 and 15 June 2015.
The investment firm also failed to conduct adequate product due diligence on the unlisted bonds before recommending them to clients and to put in place an effective system to assess its clients’ risk tolerance and ensure the recommendations and/or solicitations made to its clients in relation to the unlisted bonds were suitable for and reasonable for them.
GEO was reprimanded for not maintaining any documentary records of the investment advice or recommendations given to its clients nor provide them with a copy of the written advice and make disclosures to clients of the commission it received for the successful placement of the unlisted bonds.
Before these regulatory breaches, GEO had a clean disciplinary record.