Stockbroker pleads guilty

An investigation by the regulator has led to the conviction of a Victorian stockbroker on six charges of dishonest conduct relating to the opening and operation of a bank account using a false name, and the making and use of false documents.

Michael Kwong pled guilty in the Melbourne County Court after the Australian Securities and Investments Commission (ASIC) found that between January 21, 2002, and May 26, 2003, whilst employed at the licensed securities dealer Smith Barney Citigroup Australia, Kwong transferred without authorisation positive exchange traded option (ETO) positions from non-associated client accounts of which he or his associates had control.

He also transferred negative ETO positions to non-associated client accounts from accounts he controlled.

These unauthorised transfers resulted in the non-associated client accounts sustaining losses of around $400,000, while his associated client accounts made gains of $400,000.

The additional charges related to actions Kwong made between March 11, 2002, and July 31, 2003, when he opened and operated a cash management trust account in a false name with Macquarie Investment Management.

The conviction follows on from Kwong being permanently banned in October 2003 from acting as a representative of a dealer or investment adviser by ASIC. The regulator acted on information supplied by Smith Barney in relation to his trading activities. At the time Kwong consented to the ban, but made no admissions in relation to his conduct.

Kwong is due to be sentenced at a later date.