The Securities & Futures Commission has banned Charles Lee Schmitt from re-entering the industry for life as he misappropriated client assets from the CSA Absolute Return Fund and has been convicted of false accounting.

Schmitt was responsible for advising the fund and giving instructions to the fund custodian for allocating investors' subscription proceeds to the sub-funds.

Schmitt diverted the investors' subscription proceeds for the fund for his own use by allocating the proceeds to sub-funds with names strikingly similar to the fund's sub-funds and company bank accounts of which Schmitt was an authorised signatory.

Police arrested Schmitt and charged him with offences under the Theft Ordinance. He pleaded guilty to 19 counts of false accounting at the High Court on September 21 and is awaiting sentence.

Intolerable acts

As a result of Schmitt's conviction, the commission concluded that his fitness and properness had been called into question and decided to ban Schmitt for life from re-entering the industry.

The commission's Executive Director of Enforcement Mark Steward said theft and forgery are serious misconduct and the commission will ban those who engage in such conduct from the industry for life to protect the investing public and deter such misconduct in others.