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SEC suspends an investment consultant for failing to comply with a client’s instruction



Thursday 4 April 2019 | No. 35 / 2019


Bangkok, 4 April 2019 – The SEC has suspended the approval of Mr. Pat Chaimahawon as capital market investment consultant and branch manager or equivalent position for two months because he did not comply with a client’s instruction and gave investment advice that implied guarantee of returns or encouraged expectation of returns without supporting information or documents. At the time of the misconduct, he was working for KASIKORN Securities Public Company Limited.

Following the client’s complaint regarding damage from block trading of single stock futures, the SEC’s further investigation revealed that during the month of October 2017, Pat failed to comply with the client’s instruction to cut loss when the client’s derivatives trading account hit a one-million baht loss. As a result of his negligence, the client’s account was closed and the client suffered loss. Moreover, Pat advised the client to wait for a quota of IPO shares and expect such shares to compensate for the loss incurred in the client’s derivatives trading account.

Pat’s behaviors above were considered a failure to perform duties with responsibility and deliberation as a professional. His non-compliance with the client’s instruction and his giving of advice with the implication of return guarantee and expectation without having supporting information or documents to back up his claim were in contravention of the Notification of the Capital Market Supervisory Board*. The SEC therefore suspended his approval as investment consultant and branch manager or equivalent position for two months for failing to comply with the client’s instruction, effective from 5 April 2019, and disclose the inappropriate behaviors related to giving of investment advice to imply guarantee of returns or let investors expect returns without supporting information or documents. 

Investors are advised to study relevant information and associated risks carefully and thoroughly when deciding to open a trading account for each product type. For example, opening a derivatives trading account for a block trade comes with various conditions under the contract made with the responsible securities company. Thus, investors should be fully aware of risks associated with such specific type of trading. 
 
                                                                                                    _____________________________

Remark:
* Clause 23(2) and deemed to be the prohibited characteristic of the personnel in the capital market business 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, as amended by  the Notification of the Capital Market Supervisory Board No. Tor Lor Thor. 48/2560 Re: Rules on Personnel in the Capital Market Business (No. 7) dated 30 August 2017.  






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