Former DBS trader convicted in Singapore's first spoofing case
A former trader at DBS Group Holdings Ltd's brokerage unit
on Friday was convicted by a Singapore court for spoofing the securities market
in the city's first such criminal case.
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Bloomberg
11 March 2017
A former trader at DBS Group Holdings Ltd's brokerage unit on Friday was convicted by a Singapore court for spoofing the securities market in the city's first such criminal case.
Dennis Tey Thean Yang, 33, pleaded guilty to eight of the 23 charges he faced, including attempts to artificially move prices through fraudulent securities orders and misusing other people's trading accounts without consent.
Tey was a broker at DBS Vickers Securities (Singapore) Pte when he committed the offences over four months in late 2012 and early 2013. He made a profit of S$30,239 (US$21,310).
Regulators and exchanges are stepping up scrutiny of market misconduct and Tey's case is the first by the Monetary Authority of Singapore and the white-collar crime police since they banded together in 2015 to probe offences.
Singapore Exchange, which runs the city's securities and derivatives venue, last month said it would focus on cases that threaten market integrity after punishing traders for false trading.
Deputy Public Prosecutor Kwek Chin Yong called Tey's scheme sophisticated, saying it was one that wasn't easy to pull off.
The prosecution sought a jail term of as long as six months.
"This is one of the hardest fraud cases to be executed by one person," said DPP Kwek. "We can't encourage this sort of behaviour to continue gaming the system."
According to court papers, Tey tried to manipulate prices of so-called contracts for differences (CFDs), where investors can profit from the price fluctuations of underlying assets without actually owning them.
After purchasing the CFDs, he would make fake orders in the underlying securities which he would then delete.
The trades, which involved underlying securities in companies such as Samudera Shipping Line Ltd and Asia Power Corp, had little or no market impact and Tey's orders were ultimately not filled, said his lawyer Adrian Wee.
The trading strategy was formulated through observation as well as trial and error, and Tey stopped trading when he realised it could be unlawful, the lawyer added.
"This was one guy, in a room, in front of his computer," said Mr Wee, adding that Tey's actions weren't as sophisticated as what the prosecution made it out to be. "These trades do not require special access or for one to be a licensed individual."
Tey, a Malaysian national, left DBS Vickers in March 2014 and was arrested in May 2015. He will be sentenced on March 22.
DBS said in a statement that it had zero tolerance for criminal behaviour and cooperated with the probe into Tey's activities. "We continue to be vigilant, and today, controls have been enhanced to mitigate against similar situations."