Victory Securities was fined! 1.7 million+ and its license suspended for 3 months

The Hong Kong SFC took action on July 24, severely reprimanding Victory Securities and imposing a fine of 1.7 million. The responsible officer, Zhao Ziliang, had his license suspended for 3 months (from July 22 to October 21).
Why was it fined?
It was related to a “pump-and-dump type of securities warehousing/dumping” case.
In 2019, a client opened an account with Victory. The client said they wanted to sell stocks held by another brokerage and provided proof of holdings. However, the SFC found that the client’s holdings did not match the client’s own declared financial situation at all—clear warning signs.
What happened then? Victory did not conduct sufficient due diligence and did not report the suspicious situation to the SFC. Later, it was discovered that the client may have provided fake documents.
What did the SFC say?
Victory failed to meet the requirements of the Code of Conduct and the anti-money laundering regulations, and Zhao Ziliang, the responsible officer, did not fulfill his supervisory responsibility.
But the SFC also said this was an isolated incident, not a systemic loophole. Victory later improved its internal processes, cooperated with the investigation, and Zhao Ziliang had not been disciplined before.