The Financial Supervisory Commission (FSC) has asked the Taiwan Stock Exchange (TWSE) to investigate the suicide of a KGI Securities Ltd (凱基證券) employee amid rumors about excessive sales pressure and personal debts.
A 38-year-old stock broker surnamed Lai (賴), who was allegedly NT$18 million (US$609,632) in debt due to losses from actions taken on his clients’ discretionary accounts, committed suicide in Taipei on Aug. 19, Chinese-language media reported last week.
“We will sort through all the information to secure the truth,” Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) said by telephone yesterday.
The TWSE would investigate KGI Securities to see if it sets unreasonable sales targets for its staff and if it manages its employees appropriately, Tsai said.
The exchange would also see if KGI encouraged Lai to manage his clients’ discretionary accounts, which means he could decide which securities to buy or sell without waiting for orders, and if it pushed him to focus on futures trading, she said.
“Securities brokers cannot manage their clients’ discretionary accounts. If Lai did so, and KGI knew about it, but did not stop him, it would be at fault for poor internal controls,” Tsai said.
The TWSE has sent staff to KGI Securities offices in Taipei and would inspect Lai’s documents as well as the firm’s internal records, TWSE spokeswoman Rebecca Chen (陳麗卿) said by telephone.
The Chinese-language Apple Daily, citing Lai’s reported suicide note, said that a KGI manager encouraged Lai to use a laptop in the office to secretly put through orders for his clients.
The TWSE probe would determine if that was true, Chen said.
“Using a laptop could be a way to avoid internal inspections, as staff should not be allowed to secretly put through orders.” she said.
KGI Securities said it could not comment on the media reports, but it regretted Lai’s death and would offer assistance to his family.
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