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HONG KONG—Hong Kong's securities regulator plans to bring more cases against investment banks for shoddy work on initial public offerings, the body's enforcement chief said Wednesday.

Tom Atkinson, head of enforcement at Hong Kong's Securities and Futures Commission, said in one of his first public addresses since taking up the post that the commission has identified the issue as a priority. He said the conduct of some sponsors—the investment bank or firm responsible for managing an IPO offering—has "left a lot to be desired."

Sponsors shepherd companies through the listing process and are responsible for conducting due diligence on the companies before they list. Hong Kong is the world's No. 1 market for IPOs this year.

Mr. Atkinson, who was named to his post in March, said the commission has created a specialized team to focus on the issue and that Hong Kong's securities regulator will "hopefully hold firms and senior management accountable." Pinpointing individuals is a particular focus for the regulator going forward, he said. The regulator will focus more on individuals' behavior as it "has the tools to do that," he said.

The commission is looking at listings including those of China Forestry Holdings Co., underwritten by UBS Group AG and Standard Chartered PLC; and China Metal Recycling (Holdings) Ltd., underwritten by UBS, The Wall Street Journal has reported. The two companies, whose 2009 IPOs raised a combined total of more than US$400 million, were put in liquidation after regulators found evidence of fraudulent accounting.

Both banks have said the regulator plans action against them over IPOs.

While Hong Kong's securities regulator in the past has taken on cases against local brokers and mainland Chinese firms operating in Hong Kong, it has rarely probed the IPO work of big Western investment banks. However, in recent years, investors have been stung by a string of high-profile failures of recently listed companies that carried the imprimatur of Western underwriters.

Rules clarified in 2013 could make investment banks and bankers criminally responsible for false information in the prospectuses of companies they take public—raising the bar for work on such deals.

Mr. Atkinson said the regulator is also focused listed company-related issues such as corporate fraud. He also defended trading suspensions in Hong Kong, which have caused ire among companies and investors alike.

He said the commission has acted "judiciously" though the number of such suspensions has increased substantially since 2012.

Write to Julie Steinberg at julie.steinberg@wsj.com

(END) Dow Jones Newswires

November 08, 2016 23:45 ET (04:45 GMT)

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