Bangkok, 21 November 2016 - The SEC has revoked the approval of eight securities investment consultants of {X1} Public Company Limited for committing frauds against the assets of mutual fund clients. In this regard, six of the offenders are banned for the maximum period of 10 years each, and the other two for five years each. In addition, three branch managers of the bank were penalized for misconduct related to the offences of the investment consultants. 

Following an inspection report of {X1}, which is licensed to undertake securities business in the category of limited brokerage, dealing and underwriting of investment units (LBDU), the SEC's further investigation has revealed that during the period from August 2008 to December 2015, six of the bank's investment consultants deceitfully took clients? money intended for payments of investment unit purchases for personal gains.

In so doing, they did not execute their clients' purchase transactions via the bank system, counterfeited fund passbooks and gave them to the clients as completed transaction evidence, or opened fake accounts in the clients' names or others', and upon fund maturity deposited money of other clients into the clients' saving accounts to mislead the clients into believing that such amounts were their investment money plus benefits.

Afterward, they repeated the same method by persuading the clients to continue investing in order to seek unfair personal gains all over again.  

In addition, some of the investment consultants sent selling orders of investment units in the clients' accounts by counterfeiting unit sale documents, opening fake saving accounts and making fake ATM cards or counterfeiting the clients' signatures to withdraw money from the clients' accounts.  

The six wrongful investment consultants, each committing unrelated offences at different branches, are as follows:
(1) Ms. Kanokkarn Suankwan
(2) Ms. Punika Thavorawongkul (formerly named Kanphicha Aroonchairot at the time of committing the offences)
(3) Ms. Atchareeya Sungwalram
(4) Ms. Thanaporn Suwannapong (also branch manager)
(5) Mrs. Pranee Rodyindee and
(6) Ms. Dok-or Chotana

The SEC's findings have also revealed that two other investment consultants, namely (7) Ms. Natcha Suttipate and (8) Ms. Nijjawan Iamsaard were involved in the wrongdoing of Thanaporn by executing transactions for clients whose activities were clearly irregular in violation of the bank's regulations. For example, they withdrew money from the clients' accounts and used it for other persons' unit purchases in absence of the accounts' owners, or executed unit purchase orders by charging the payments on other clients' credit cards.

The SEC has therefore revoked the approval of the eight securities investment consultants for the following different periods accordingly: (1) - (6) offenders for 10 years each, (7) and (8) for five years. In addition, (1) - (3) revocations took effect on 21 September 2016, (4) - (6) on 17 November 2016, and (7) - (8) on 22 November 2016. 

In addition, the SEC has found defects in the work performance of three branch managers at two branches, namely (1) {I}, who failed to exercise proper discretion in solving problems when detecting deceitful acts, and (2) {J} and (3) {K}, who neglected inspection and failed to comply with the bank's internal control system, causing the suspicious issues in the dishonest acts to evade inspection. 

The SEC has therefore banned the three offenders from performing duties as branch manager in the capital market business and suspended their approval as investment consultant and investment planner for four months each; {I}'s suspension term begins on 26 September 2016, and {J}'s and {K}'s term on 22 November 2016.

In light of the above findings, {X1} has terminated the employment of the eight investment consultants above and strictly warned the three branch managers against improper duty performance. Also, {X1} has already paid for the compensation in full for each affected client.  

Owing to this case, the SEC has found that {X1}'s risk management system for unit selling and purchasing was defective, and the internal audit and internal control systems as well as the compliance system were inefficient. Besides, the bank failed to place importance in the handling of its data management system or securities business related evidence. The Criminal Fining Committee therefore imposed a fine penalty on the bank for such defects on 26 July 2016. {X1} later revised and improved the working system of its securities business and set up more efficient measures for preventing and detecting irregularities thereof.

Investors are strongly advised to exercise discretion in making mutual fund purchases and should request purchase evidence at the point of sale, which must be generated by proper system to ensure completion of their purchase transactions, and review the total balance in the confirmation document sent from the responsible asset management company. In any case, investors should not leave their fund passbooks and savings passbooks with bank officials.  Also investors should monitor movement of mutual fund as well as deposit accounts regularly, and contact the responsible bank immediately in case of inquiry.

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Note: The misconducts of the eight investment consultants and branch manager {I} were in violation of Clause 23(1) and were deemed prohibited characteristics of capital market personnel under Clause 31(1) of the Notification of the Capital Market Supervisory Board No. Tor Lor Thor. 8/2557 Re: Rules on Personnel in the Capital Market Business dated 3 June 2014. The misconducts of branch manager {J} and {K} were deemed prohibited characteristics under Clause 31(4) of the said notification.