plaintiff:
  - Securities and Futures Commission

defendant:
  - C.L. Management Services Limited
  - AU Suet-ming, Clarea

case_reason: Eight summonses alleging that C.L. Management Services Limited (D1) and AU Suet-ming, Clarea (D2) carried on or held themselves out as carrying on a business in a regulated activity, namely advising on corporate finance, without a licence in relation to three client companies (3 Wells Group Holdings Limited, UK Fur Limited, and New Bonus Holdings Limited), in contravention of sections 114(1) and 114(8) of the Securities and Futures Ordinance.

judgment_summary: The Eastern Magistrates Court convicted D1 of three "holding-out" offences under section 114(1)(b) of the Securities and Futures Ordinance (ESS 39231/2013, 30673/2013, and 30675/2013) and D2 of three corresponding attributable offences under section 390 (ESS 39232/2013, 30674/2013, and 30676/2013). The court found that D1 held itself out to the three client companies as carrying on a business in advising on corporate finance by signing Professional Financial Consultation Services Agreements that clearly represented D1 as an "exclusive financial adviser" providing advisory services concerning listing matters. D1 was acquitted of the "carrying on" offence (ESS 30671/2013) regarding 3 Wells as the court found insufficient evidence of continuity. The court ruled that offences under section 114 create strict liability falling within the second alternative (prosecution need not prove mens rea, but defendant can raise honest and reasonable belief as defence), and that "without reasonable excuse" is an element of the offence. D1 was fined a total of $900,000 and D2 was fined $600,000 and sentenced to 6 months imprisonment suspended for 18 months. Both defendants appealed against convictions and sentences.

jurisdiction_code: HKMAGC

jurisdiction_name: Eastern Magistrates Court of the Hong Kong Special Administrative Region

case_location: Hong Kong Special Administrative Region

case_object:
  - Unlicensed carrying on of regulated activity (advising on corporate finance)
  - Holding out as carrying on regulated activity without licence
  - Strict liability offences under Securities and Futures Ordinance
  - Attributable liability of corporate officers

judgment_result:
  - charge: ESS 30671/2013 - Carrying on business in advising on corporate finance without licence (3 Wells)
    result: D1 acquitted
  - charge: ESS 30672/2013 - Attributable offence for D2 (3 Wells carrying on)
    result: D2 acquitted
  - charge: ESS 39231/2013 - Holding out as carrying on business in advising on corporate finance (3 Wells)
    result: D1 convicted, fined $300,000
  - charge: ESS 39232/2013 - Attributable offence for D2 (3 Wells holding out)
    result: D2 convicted, fined $200,000 and 6 months imprisonment suspended for 18 months
  - charge: ESS 30673/2013 - Holding out as carrying on business in advising on corporate finance (UK Fur)
    result: D1 convicted, fined $400,000
  - charge: ESS 30674/2013 - Attributable offence for D2 (UK Fur)
    result: D2 convicted, fined $300,000 and 3 months imprisonment suspended for 18 months (concurrent)
  - charge: ESS 30675/2013 - Holding out as carrying on business in advising on corporate finance (New Bonus)
    result: D1 convicted, fined $200,000
  - charge: ESS 30676/2013 - Attributable offence for D2 (New Bonus)
    result: D2 convicted, fined $100,000 and 3 months imprisonment suspended for 18 months (concurrent)

involved_entities:
  - entity_name: June Cheung
    reason: Magistrate who presided over the case and delivered the verdict and statement of findings
  - entity_name: Michael ANG
    reason: Agent engaged by D2 responsible for dealing with the three client companies; refused to give evidence due to risk of self-incrimination
  - entity_name: 3 Wells Group Holdings Limited
    reason: Client company that entered into Professional Financial Consultation Services Agreement with D1 for listing on GEM Board
  - entity_name: UK Fur Limited
    reason: Client company that entered into Professional Financial Consultation Services Agreement with D1 for listing in Hong Kong
  - entity_name: New Bonus Holdings Limited
    reason: Client company that entered into Professional Financial Consultation Services Agreement with D1 for listing in Hong Kong
  - entity_name: Clement CHEUK
    reason: Chairman of 3 Wells who testified as prosecution witness (PW1)
  - entity_name: Phoebe Lee
    reason: Chief Financial Officer of 3 Wells who testified as prosecution witness (PW2)
  - entity_name: Pat WONG
    reason: Chairman of UK Fur who testified as prosecution witness (PW3)
  - entity_name: WONG Kam-fai
    reason: Chairman of New Bonus who testified as prosecution witness (PW4)
  - entity_name: PO Wing-kay
    reason: Counsel for the Prosecution, instructed by the Securities and Futures Commission
  - entity_name: Peter Duncan, SC
    reason: Senior Counsel for D1 and D2
  - entity_name: Edwin Choy
    reason: Counsel for D1 and D2, instructed by Haldanes
  - entity_name: Hin Lin Yee v HKSAR
    reason: Landmark Court of Final Appeal case establishing principles for strict liability offences and the five alternatives for mental requirements
  - entity_name: Kulemesin Yuriy & Tang Dock Wah v HKSAR
    reason: Court of Final Appeal case that reformulated the five alternatives for mental requirements in strict liability offences
  - entity_name: Securities and Futures Commission v Yu Ka Tak
    reason: Court of First Instance case holding that "without reasonable excuse" is an element of the offence under section 114
  - entity_name: Securities and Futures Commission v Liu Su Ke
    reason: Court of First Instance case that came to different conclusion regarding "without reasonable excuse" under section 328
