The Hong Kong Securities and Futures Commission received the first seizure penalty issued by the Hong Kong court against a financial influencer offering paid investment advice in social media chat groups without a license.

On November 7, the Eastern Magistrates Court in Hong Kong ruled in a criminal prosecution case brought by the Hong Kong Securities and Futures Commission (SFC) that financial influencer Chow Pak Hin (formerly known as Chow Kin Hei) was guilty of providing investment advice in a subscription-based chat group on Telegram without a license. Chow was sentenced to six weeks in prison and was also ordered to pay the SFC's investigation costs. It was reported that between April 16, 2021, and May 14, 2021, Chow established and managed a Telegram chat group named "Futu Genuine Wealth Private Group" under the username "Futu." The chat group welcomed public subscriptions for a fee. During this period, Chow posted comments, recommended advice, and target prices on multiple securities in the Telegram chat group, and responded to questions from paying subscribers about the performance of NASDAQ-listed securities. Chow charged a monthly subscription fee of $200 or 1,560 Hong Kong dollars to members of the Telegram chat group, earning a total of $43,680 in subscription fees. Mr. Michael Duignan, Executive Director of Enforcement at the SFC, stated: "The SFC is committed to combating illegal activities of financial influencers. When financial influencers engage in regulatory activities that require a license on social media and online platforms, we will not hesitate to hold them accountable." "Unlicensed financial influencers in Hong Kong may not meet the standards of conduct and accountability required by the SFC, potentially exposing investors to significant risks and harm. Therefore, investors should verify the regulatory status of financial influencers, remain vigilant when considering their opinions, and ensure they fully understand the risks and key features of any investment opportunities being sold through social media or online." Chow was remanded in custody after his bail application was denied, awaiting his appeal against the conviction and sentence. The SFC reminds the public to refer to the "Public Register of Licensed Persons and Registered Institutions" on the SFC website to ensure that companies and individuals providing investment advice on securities hold the appropriate licenses.