The firm is based in Melbourne; it has held an Australian financial services licence since 2004. Li is the responsible manager of the financial services business of SIS and an authorised representative of its AFS licence.

The probe by the Australian Securities and Investments Commission found that SIS had not lodged financial statements for the financial years ended 30 June 2013, 30 June 2014 and 30 June 2015. It also found that as at 31 December 2014, there was a A$355,144 ($256,018) deficiency of cash held in the trust accounts of SIS on behalf of the clients of SIS. The clients of SIS had not consented to certain withdrawals being made from the trust accounts, and Li had authorised the withdrawals as the sole director of SIS, the regulator said.

Li and his firm have agreed not to reapply for an AFS licence or provide financial services in any form for 10 years from the date of the enforcement undertaking (EU).

"ASIC has accepted an EU which requires SIS and Mr Li to repay to clients the entire amount that should have been held in each client's trust account," the watchdog said in a statement.

"SIS and Mr Li acknowledge that, due to the absence of a formal trust deed being in place with each of the clients, SIS and Mr Li misunderstood that the client funds were to be held in trust for the benefit of clients," it added.

SIS and Li have since deposited sufficient funds in the trust accounts to repay all of the clients, it added.

The firm must apply with the regulator to cancel its AFS licence and revoke Li's authorisation, the statement from ASIC said.