Yuanta Securities Former Executive Banned from Industry for 4.5 Years Over Unauthorized Matched Trading and Secret Account Operations

On March 19, the Hong Kong Securities and Futures Commission (SFC) announced on its official website that former senior executive of Yuanta Securities (Hong Kong) Limited (hereinafter referred to as “Yuanta Securities”), Guo Zherong, engaged in matched trading and operated a secret account for Hang Seng Index options. He is prohibited from re-entering the industry for four and a half years, from March 19, 2026, to September 18, 2030, and fined HKD 1 million.

The SFC investigation found that between July 2, 2020, and November 24, 2020, while serving as a proprietary trader at Yuanta Securities, Guo Zherong used a coordinated trading approach to execute 25 matched trades of Hang Seng Index options between Yuanta Securities’ proprietary trading account and another securities account held in his wife’s name at a different brokerage. These matched trades allowed his wife’s account to gain nominal benefits at the expense of Yuanta Securities’ interests.

Additionally, Guo Zherong executed multiple matched trades at prices outside the prevailing bid-ask spread, which could interfere with the neutrality and objectivity of normal pricing processes. He also transferred some profits from his wife’s account to his personal account, ultimately profiting from these matched trades. The SFC believes that Guo Zherong’s actions not only benefited his wife at the expense of Yuanta Securities but also undermined market integrity and stability.

Further investigation revealed that Guo Zherong concealed his beneficial interests in his wife’s account, two securities accounts at another brokerage, and his personal trading activities in these accounts. While hiding these accounts, he repeatedly submitted false disclosures to Yuanta Securities, claiming that aside from one account approved by Yuanta Securities, he did not maintain any other securities trading accounts under his name or over which he had beneficial ownership or influence.

The SFC stated that Guo Zherong’s conduct violated Yuanta Securities’ employee trading policies and hindered the company’s oversight of his personal trading activities. Due to the serious nature of his misconduct and dishonesty, concerns were raised about his suitability as a licensee. When deciding on the disciplinary action, the SFC took into account his cooperation in addressing the issues raised and his clean disciplinary record to date.