TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Grace Leong
31 August 2013
Five employees of Phillip Securities Pte Ltd were charged yesterday with a total of 40 criminal counts of fraud under the Securities and Futures Act (SFA) for allegedly conducting trades that were against the retail brokerage’s interests.
Malaysian Wong Siaw Seng, 28, and Singaporeans Joseph Tan Kian Ming, 30, and Oh Chao Qun, 32, each face 10 counts for offences under Section 201(b) of the SFA. Two other Singaporeans - Vincent Tan Wei Ren, 30, and Ng Sae Kiat, 32 - face six counts and four counts respectively for similar violations.
According to the charges, the five, between Dec 18, 2007 and July 30, 2009, allegedly used nine securities accounts belonging to friends and relatives to initiate trades; and then used their positions as Phillip employees to accept these trades at prices that weren’t at market value.
By controlling both ends of the trade, the five, who were “contracts for differences” (CFD) hedgers, could conclude trades at any price they wanted, even if the prices were not in Phillip’s interests.
CFDs are derivative products that allow an investor to participate in the price action of an underlying asset, which could be currencies, commodities, or a stock index. These securities have to be routed to CFD hedgers as they aren’t automatically accepted by Phillip.
Deputy public prosecutors Kwek Chin Yong and Lynn Tan have offered to proceed on five of 10 charges faced respectively by Wong, Oh and Joseph Tan, and to take the remaining charges into consideration, if they plead guilty.
Hamidul Haq of Rajah & Tann LLP, who represents the three men, said that his clients are reviewing the charges and deciding on the next course of action.
Prosecution also offered to proceed on three of six charges faced by Vincent Tan, and to take into consideration the rest; and to proceed on two of four charges Ng faces, and to take the rest into consideration, if they plead guilty.
Ng indicated in court yesterday that he would plead guilty, while Vincent Tan said that he would like to get a lawyer.
If convicted, the men could be liable to a fine of up to $250,000 or imprisonment of up to seven years, or both, on each charge.
All five are out on police bail.
According to the charges, the five worked collectively to commit fraud against Phillip, conducting “out of market” purchases of CFDs from the brokerage, and “out of market” sales to the brokerage through nominee accounts. “Out of market” trades refer to trades against Phillip’s interests.
Simply put, since the five were Phillip employees and could not ordinarily initiate their own trades, they borrowed accounts that belonged to others to make offers to Phillip in order to dupe the brokerage into thinking that a member of the public had placed an order.
Once the trade was initiated, the men would, allegedly without Phillip’s authorisation, accept these at prices “below the prevailing best ask price for the underlying securities that were listed on the Singapore Exchange Securities Trading Ltd”, if they were buying the securities.
Conversely, they would accept trades at prices “above the prevailing best bid price” if they were selling securities. In doing so, they gave themselves discounts for purchases and profits from sales.
“This case will set a legal precedent for the Singapore securities market. The development of the case will no doubt be closely monitored,” said senior corporate lawyer Robson Lee.