February 9, 2026
A conflict of interest happens in financial firms when an employee, executive, or director has multiple competing interests and serves one to the detriment of another. An individual may put personal financial gains above the interests of their firm, clients, and broader financial market integrity. They may also use confidential information, manipulate others to share information, or even offer and receive bribes to create unfair advantages and personally beneficial outcomes.
While individuals may seek short-term, financially motivated gains, employee conflicts of interest can result in lasting negative impacts for individuals and the firms they operate within. Financial penalties that impact profitability, reputational damage, loss of ongoing revenue, and even personal imprisonment in severe cases are just a few of the long-term consequences of breaching regulations relating to conflicts of interest.
This article takes an in-depth look into recent examples of employee conflicts of interest across the Asia-Pacific (APAC) region, from insider trading to outside business activities.
In 2025, the Australian Securities and Investments Commission (ASIC) charged a former Australian investment manager with insider trading. The case revealed the fund manager was hired by the Chairman of an Asset Management company as an investment analyst. The fund manager accessed the Chairman's personal computer and photographed confidential takeover documents. He then traded and encouraged others to trade in that firm’s securities, even leaking details of the takeover to the media. The resulting financial gains for the fund manager totalled in excess of AUD$300,000 profit.
ASIC’s surveillance technology detected his suspicious trades, and in January 2026, the Federal Court sentenced the fund manager to 6 years imprisonment and the forfeiture of illegal profits.
ASIC Chair Joe Longo said of the case, “While some insider trading cases can take several years, Mr Forrest went from crime to jail time in just over a year, underscoring ASIC’s determination to fast-track criminal cases of this type”, going on to say that ASIC will continue “cracking down on insider trading and other misconduct that damages market integrity.”
Even a single undetected violation of personal account dealing policies and regulations can have wide-reaching ripple effects on a financial firm, such as a loss of investor confidence, simply through association with the individuals involved.
Robust internal controls and surveillance are essential to detect and deter any unethical personal trading before it damages the firm. Modern compliance technology provides practical ways to achieve this. For example, a platform like MyComplianceOffice (MCO) enables firms to:
Implement effective surveillance: Monitor and flag employees’ personal trades in real time against defined rules, helping to promptly identify suspicious activity or policy breaches.
Enforce personal trading policies: Automate enforcement of the firm’s personal account dealing rules (e.g. no trading on restricted securities or during blackout periods) by running all trade requests through a rules engine that checks for conflicts such as trading on MNPI or other prohibited transactions.
Manage access to MNPI: Maintain insider lists and information barriers to control who can access sensitive deal information. MCO’s insider information management tracks which employees have material non-public information and ensures those individuals are subject to trading restrictions.
Manage pre-clearance workflows: Streamline the pre-clearance process for employee trades with an electronic system that requires staff to obtain approval before trading. Trade requests are automatically reviewed against compliance criteria and approved or escalated according to the firm’s policies.
Ensure compliance reporting: Capture complete records of personal trading activity and insider list updates, and generate thorough compliance reports. This provides an auditable trail and evidence to demonstrate the firm’s oversight and adherence to regulations.
By deploying surveillance and control tools in line with regulatory expectations, financial firms can catch conflicts of interest much earlier and prevent them from turning into more serious incidents. Compliance platforms like MCO help organisations provide continuous oversight, helping to identify trading patterns that may suggest misuse of sensitive information.
Regulators across the APAC region show consistent enforcement of fit and proper standards. These standards exist to ensure individuals meet the knowledgeable and ethical requirements of regulated activities performed within their roles. For example, the Monetary Authority of Singapore (MAS) provides guidelines for Fit and Proper Criteria (FSG-G01). Relevant persons carrying out regulated activities under the guidelines are expected to conduct themselves with competence, honesty, integrity, and to be of sound financial standing.
In October 2025, MAS banned two former representatives of a financial advisory firm for 3 years over gross misconduct and the cover-up of a serious conflict of interest incident. One adviser forged a client’s signature to prematurely terminate a policy, further attempting to conceal the misconduct when his firm investigated the matter. The adviser additionally lied to the Singapore Police Force (SPF) during their investigation on his forgery.
At the time of the misconduct, the adviser’s supervisor was also aware of the attempted concealment of that misconduct. Instead of reporting it, as required, the supervisor encouraged the adviser to maintain the lie to the SPF.
Every financial firm needs thorough training on ethical sales practices, immediate escalation of any compliance breaches, and a robust system of confirming all staff are deemed “fit and proper” for the requirements of their roles.
MCO offers a streamlined Representative Registrations and Licensing (RRL) module to bring transparency and reduce complexity of tracking and assuring fit and proper requirements.
RRL integrates with internal systems, including HR, to provide assurance that licensing and continuing education requirements are kept up to date across your firm. It also manages ongoing renewals, qualifications, exams, and continuing education for all staff.
In January 2026, the Hong Kong Securities and Futures Commission (SFC) reprimanded and fined a capital markets firm HK$4 million for failure to comply with regulatory requirements in its handling of virtual asset (VA) products on its online trading platform.
The firm allowed retail investors to trade virtual asset funds and related products that were not authorised by the SFC. The products in question should have been offered only to professional investors under the applicable rules. During the period from November 2018 to November 2022, the firm executed 1,446 transactions in 32 VA products for 130 retail clients and a handful of professional investors on its platform. These products, including 21 exchange-traded VA derivative products, were considered complex products, triggering suitability and disclosure obligations.
The firm had self-reported the misconduct, ceased the related business, and voluntarily compensated affected clients. The SFC noted that the firm’s “cooperation with the SFC and acceptance of the SFC’s findings and disciplinary action facilitated an early resolution of the matter”. Nonetheless, the SFC reinforced that the violations warranted a substantial penalty.
This case highlights the clear regulatory expectation for all licensed firms involved in digital asset trading in Hong Kong. The country’s VATP regime consistently points firms back to four practical areas:
1) Governance and “fit and proper” oversight
Licensing requires demonstrable senior management accountability, resourcing, and competence. Firms need clear lines of responsibility, risk ownership, and evidence that compliance does not stop at policy documents.
2) AML/CFT controls tailored to virtual assets
Hong Kong’s regulators apply risk-based AML/CFT expectations to licensed corporations and SFC-licensed virtual asset service providers. Firms must implement controls that reflect the realities of virtual assets, including onboarding, source-of-funds checks, transaction monitoring, and escalation workflows that match the risks of the products offered. The SFC’s AML/CFT guideline sets out the standards and the expectation that firms operationalise them.
3) Market integrity, surveillance, and conflicts management
A licensed platform needs credible monitoring for market abuse risks that can arise in high-volatility, always-on markets. That surveillance and management includes restricted tokens, information barriers, staff dealing risks, and the potential misuse of sensitive information. In practice, this pushes firms to treat employee trading and personal account dealing in virtual assets as a conduct risk area.
4) Custody and client asset protection
Hong Kong’s regulators continue to refine supervisory expectations for safe custody of client virtual assets. Firms must show they can protect client assets, manage wallets and key controls, and run safeguarded operational processes.
In October 2025, the Malaysian Anti-Corruption Commission, in conjunction with Bank Negara’s oversight, charged two bank officers and a former executive for accepting a total of RM450,000 in kickbacks to approve personal loans that extended beyond the borrowers’ credit limits. In one instance, a senior bank marketing officer is accused of accepting RM378,166 in cash from an individual representing a financial consultancy firm on 30 different occasions. The cash payments are alleged to be gratification for assisting in the processing of personal financing applications. Two other bankers were also charged for receiving illicit payments to push through ineligible loan applications.
The individuals involved were suspended and face court trials, with prosecutors pressing for strong punishment as a deterrent. If convicted, these individuals face imprisonment of up to 20 years and a fine of not less than five times the sum or value of the gratification involved.
To control such risks, Malaysian banks are required by BNM to implement appropriate governance and anti-bribery and corruption (ABC) compliance programs. The BNM Policy Document on Anti-Money Laundering and Counter Financing of Terrorism, latest rev. 2024, reinforces Know-Your-Customer (KYC) requirements and related controls to detect and prevent irregular loans. Banks must conduct thorough customer due diligence, verifying the identity of their customers and understanding the customer’s background, before and during a lending relationship.
An essential part of this due diligence process is having an automated monitoring system in place that can identify unusual or suspicious activity in real-time. MCO provides firms with a centralised system that handles onboarding, screening, ongoing monitoring and reporting on a single platform. The complete compliance solution ensures continuous visibility into risk exposure while maintaining accuracy and auditability, enabling firms to prove consistent and defensible compliance.
Regulators across the globe have placed increased scrutiny on conflicts of interest in recent years. Simply having systems in place to monitor conflicts is no longer enough. The proper technology plays a vital role in helping your firm more efficiently manage and minimise conflicts of interest. Review your technology and ensure it will:
A centralised RegTech platform removes compliance teams’ reliance on spreadsheets and disconnected processes. It replaces that reliance with real-time visibility into risk across all aspects of employee conflicts of interest, consistent controls across jurisdictions, and audit-ready records that demonstrate identification, assessment, and response to conflicts, as well as the implementation of actions to further mitigate conflicts.
Every financial firm, regardless of size or strategy, deserves the technology to protect the firm and its employees from financial and reputational harm and uphold regulatory expectations.
MyComplianceOffice (MCO) exists to help financial institutions:
Consider your firm’s need for a comprehensive, automated compliance solution with full audit trails to build a more responsive, risk-informed compliance framework across all aspects of employee conduct and conflict-of-interest management.
