SECURITIES AND FUTURES COMMISSION v. C.L. MANAGEMENT SERVICES LTD AND ANOTHER

SECURITIES AND FUTURES COMMISSION v. C.L. MANAGEMENT SERVICES LTD AND ANOTHER

Section 114(1)(b) is a regulatory offence in which the presumption of mens rea is displaced; the offence is constituted by the act of holding out unless a reasonable excuse is established; on the facts the agreements and conduct established A1 held itself out as carrying on corporate finance advisory services and A2, as directing mind of A1, was properly convicted under s390; the magistrate’s factual findings were not perverse and the appeals are dismissed.

Citation
SECURITIES AND FUTURES COMMISSION v. C.L. MANAGEMENT SERVICES LTD AND ANOTHER
Parties
Respondent: Securities and Futures Commission; 1st Appellant: C.L. Management Services Limited; 2nd Appellant: Au Suet Ming Clarea
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 June 2016
Case Number
HCMA382/2014
Procedural Posture
Magistracy Appeal (criminal) / Judgment on Appeal (court of First Instance)
Outcome
Appeal dismissed; convictions of A1 and A2 upheld
Legal Topics
Unlicensed Regulated Activity, Holding Out, Strict Liability for Regulatory Offences, Statutory Defence of Reasonable Excuse, Aiding and Abetting / Officer Liability (s390)
Source Language
EN
Criminal Law Securities Regulation Corporate Finance Law Unlicensed Regulated Activity Holding Out Strict Liability for Regulatory Offences Statutory Defence of Reasonable Excuse Aiding and Abetting / Officer Liability (s390)

Case Brief

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Parties

Securities and Futures Commission

Respondent

C.L. Management Services Limited

1st Appellant

Au Suet Ming Clarea

2nd Appellant

Procedural Posture

Magistracy Appeal (criminal) / Judgment on Appeal (court of First Instance)

Legal Issues

  1. 1 Whether s114(1)(b) of the Securities and Futures Ordinance is a strict liability/regulatory offence subject only to the statutory defence of reasonable excuse
  2. 2 Whether the appellants’ conduct amounted to holding out as carrying on a business in advising on corporate finance
  3. 3 Whether A2 is liable under s390 as an officer for conduct of A1 (aiding, abetting, procuring or consenting to the offence)

Ratio Decidendi

Section 114(1)(b) is a regulatory offence in which the presumption of mens rea is displaced; the offence is constituted by the act of holding out unless a reasonable excuse is established; on the facts the agreements and conduct established A1 held itself out as carrying on corporate finance advisory services and A2, as directing mind of A1, was properly convicted under s390; the magistrate’s factual findings were not perverse and the appeals are dismissed.

Court Disposition

Appeal dismissed; convictions of A1 and A2 upheld

Orders

  • Appeal dismissed
  • Convictions of C.L. Management Services Limited and Au Suet Ming Clarea upheld