Civil penalties of S$100,000 each for two over SFA breaches
The Monetary Authority of Singapore (MAS) announced on
Thursday that the state courts had ordered civil penalties of S$100,000 each
against two individuals - John Chionh Teow Hie and Kiew Yoon Seng - for false
and unauthorised trading in contravention of the Securities & Futures Act
(SFA).
Comments
Vivien Shiao
17 February 2017
The Monetary Authority of Singapore (MAS) announced on Thursday that the state courts had ordered civil penalties of S$100,000 each against two individuals - John Chionh Teow Hie and Kiew Yoon Seng - for false and unauthorised trading in contravention of the Securities & Futures Act (SFA).
Between June 2008 and November 2009, Mr Chionh and Mr Kiew engaged in false trading in the shares of Keda Communications, a company delisted from the Singapore Exchange's Catalist board in 2010.
The two crossed 52 trades with each other using trading accounts held with Phillip Securities Pte Ltd (PSPL).
Cross trades are trades whereby two persons pre-arrange to trade with each other as counterparties and there is a change in the beneficial ownership of the traded securities.
This led to false or misleading appearances with respect to the price and market for Keda shares.
In addition, Mr Chiohn also conducted six wash trades - trades that do not involve a change in the beneficial ownership - through two of his trading accounts (one with PSPL, and the other with Lim & Tan Securities), which essentially meant that he was trading with himself. The 58 cross trades and wash trades collectively accounted for 34 per cent of the total traded volume of Keda shares between June 2008 and November 2009. Many of these actions artificially raised the price of Keda shares, with increases ranging from 11 to 146 per cent from the previous traded price.
Mr Kiew also carried out cross trades with Mr Chionh through a trading account belonging to Lee Hon Sun that was held with PSPL. Neither Mr Kiew nor Mr Lee informed or sought authorisation on this.
According to MAS, both had intentionally deceived PSPL of the true beneficial owner of the account so that Mr Kiew could enjoy a lower rate of brokerage fee which he would not have otherwise been entitled to. As a result, their conduct contravened the Securities and Futures Act.
In a separate out-of-court settlement in January 2013, Mr Lee paid MAS a civil penalty of S$50,000.
Lee Boon Ngiap, assistant managing director (capital markets), MAS, said: "The price of securities was manipulated in this case by way of coordinated cross trading between two individuals, and by one of the individual's wash trades. The civil penalty actions against these individuals reflect MAS' firm resolve to stamp out such misconduct from our markets."