The Securities & Futures Commission has reprimanded Sun Hung Kai Investment Services' former responsible officer Edmond Chau for market misconduct, fining him $2 million and banning him from the industry.

The action follows the Market Misconduct Tribunal's determination Chau and three other parties engaged in market misconduct by false trading and price rigging in the shares of QPL International Holdings.

From May 6 to June 10, 2003, Chau engaged in scaffolding activities by placing numerous buy orders for QPL shares and subsequently cancelling, reducing these orders or allowing them to lapse so two Sun Hung Kai clients could sell their holdings of QPL shares more actively and quickly.

Not only was Chau in breach of Sun Hung Kai's internal policies, he also abused his senior position as responsible officer by procuring the assistance of or conniving with his subordinate to conduct these unlawful activities.

During the commission's investigation he denied having conducted any scaffolding activities or engaged in any market misconduct, but admitted he had done so during the tribunal proceedings.

In deciding the sanctions the commission took into account that Chau played a primary role in perpetrating the market misconduct for five weeks, and his misconduct was only ended by the commission's intervention with its inquiry into the QPL shares trading. While he had abused his senior position, Chau has a clear disciplinary record with the commission and consented to the disciplinary action.