Chatting App Telegram fined by Hong Kong's SFC for unlicensed securities activities

The Securities and Futures Commission (SFC) of Hong Kong recently obtained a court ruling which found a man guilty of providing paid investment advice within a Telegram chat group. This case serves as a reminder to investors to ensure that individuals or companies providing advice hold the necessary legal licenses before seeking investment guidance.

Convicted of Providing Investment Advice Without License

On June 20, 2024, the Eastern Magistrates' Court in Hong Kong ruled that a man named Wong Ming Chung was guilty of providing investment advice in a Telegram chat group he established and managed without the necessary license. Wong admitted to his offense in court, was fined HK$10,000, and ordered to pay the investigation costs of the Securities and Futures Commission.

Background of the Illegal Activity: Unlicensed Offering of Investment Advice to Paying Subscribers

Although Wong Ming Chung was a licensed representative of the Securities and Futures Commission in Hong Kong, he was only authorized to act on behalf of his company. In this case, Wong operated a Telegram chat group under his personal name, which violated relevant regulations. From January 2, 2018, to May 21, 2019, Wong managed a Telegram group named "FRANKY - Live Market Broadcast," providing investment advice on the Hang Seng Index and Hong Kong-listed securities to paying subscribers.

SFC Reminder: Verify the Source of Investment Advice

The Securities and Futures Commission reminds investors to check the public register of licensed individuals and registered institutions on the SFC website before accepting investment advice to ensure that the advice comes from companies or individuals with appropriate licenses. This not only protects the interests of investors but also helps prevent similar incidents of providing investment advice without a license from happening again.

Similar incidents have occurred in Taiwan, where cryptocurrency investment advisors have been warned by the Financial Supervisory Commission, although the enforcement is not as strong as that of the Hong Kong Securities and Futures Commission.

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