The British Columbia Securities Commission (BCSC) is alleging that a self-employed trader in foreign exchange (Forex) committed fraud by concealing how he earned commissions and by offering clients false guarantees to reimburse them for any losses and for engaging in unregistered trading.
BCSC executive director Paul Bourque filed a notice of hearing on August 6 alleging that, between April 2009 and June 2011, Hong Liang Zhong met with 14 B.C. residents about Forex trading on their behalf. Zhong is a B.C. resident who has never been registered to trade securities in B.C., according to the BCSC.
The BCSC claims that Zhong filled out electronic applications to open trading accounts for his forex clients at two online brokerage firms. In the account applications, Zhong listed himself as a referring broker so he could receive commissions from the brokerage firms based on the volume of trading in the Forex clients’ accounts, according to the BCSC.
As Zhong would not be eligible for the referring-broker commission if he had trading authority over the accounts, he made his spouse the apparent trading agent, the BCSC said in a release.
However, Bourque maintains that it was Zhong, not his spouse, who executed trades on behalf of the Forex clients.
