Compliance & Regulation

HK court convicts ETRADE Securities in landmark case

Hong Kong’s Eastern Magistrates’ Court has convicted ETRADE Securities (Hong Kong) for actively marketing to the Hong Kong public US brokerage services of E*TRADE Securities, which was not a licensee of the Securities and Futures Commission.

This is the first criminal conviction secured by the regulator against an entity for the offence of actively marketing in Hong Kong regulated activities carried out outside Hong Kong without a licence.

ETRADE HK was fined HKD20,000 and ordered to pay the watchdog’s investigation costs.

The regulator alleged that ETRADE HK had continually marketed the brokerage services of E*TRADE US for more than four years from around 11 May 2009 to 31 January 2014 through newspapers, magazines, and on the MTR, television, radio and online.

As a result of the initiatives and services provided to E*TRADE US’ Hong Kong-based clients, ETRADE HK had received revenue from E*TRADE US.