Bursa Malaysia Securities Berhad (Bursa Securities) has publicly reprimanded, imposed a fine of RM60,000 and ordered to strike off Mohd Zahir bin Abd Manan (Mohd Zahir) from the Register as a Dealer’s Representative (DR) for engaging in unlawful and unethical trading activities in the securities of H-Displays (MSC) Berhad (HDISPLAYS) and HDM-Carlaw Corporation Berhad (CARLAW).
Mohd Zahir, who was at the material time of the breach a Commissioned DR of PM Securities Sdn Bhd, triggered and breached the provisions of Rules 1302.1(1)(a)&(g), 404.3(1)(a)&(b), 404.3(6)(b), 404.4(9)(b), 1302.1(1)(i)(iii) and 310.2(6) of the Rules of Bursa Securities.
Bursa Securities views misconducts that compromise the integrity or honesty of Registered Persons seriously as Registered Persons, including DRs are required to uphold the interest of their clients and the investing public. Bursa Securities will not hesitate to take appropriate actions against anyone who engages in such conducts, including striking off a Registered Person from the Register or imposing a substantial fine commensurate with the severity of the breach.
BACKGROUND
The finding of the breach and the imposition of the above sanctions on Mohd Zahir were made pursuant to Rule 1301.2 of the Rules of Bursa Securities upon completion of due process and after taking into consideration all facts and circumstances, including that:-
- Mohd Zahir had carried out numerous unauthorised sale and purchase transactions in the securities of HDISPLAYS and CARLAW over a period of time via two of his clients’ accounts. The unauthorised transactions carried out by him had resulted in substantial contra losses which were disputed by the clients when they were subsequently informed of the losses.
- In undertaking these unauthorised dealing activities, Mohd Zahir had colluded with a third party (the identified third party) who was not a person allowed and authorised, in writing, to trade on behalf of these clients. In this regard, instructions to trade via the two clients’ accounts were received from the identified third party and were carried out by Mohd Zahir. The commission generated from these trades was shared between Mohd Zahir and the identified third party.
Mohd Zahir had also colluded with the identified third party to manipulate these two securities by maintaining their prices at certain levels. The manipulative trading activities had impacted the price of these securities during the relevant period. - Mohd Zahir’s misconduct in carrying out these unauthorised trades and participating in unlawful activities, including price manipulation of these securities over a period of time, demonstrated his blatant disregard of his obligations as a responsible DR.
- As a DR, Mohd Zahir must, amongst others,:-
- observe professional standards of integrity and fair dealing;
- carry out his duties efficiently, honestly and fairly;
- act in the best interest of his clients;
- not use his clients’ accounts to trade for a third party;
- not carry out any unlawful activities; and
- not have any arrangement for the sharing of commission with any person other than as provided under the rules.
Rules 404.3(1)(a)&(b), 404.3(6)(b), 404.4(9)(b), 1302.1(1)(a)&(g), 1302.1(1)(i)(iii) and 310.2(6) of the Rules of Bursa Securities (the Rules) state, amongst others, that:-
- every DR employed or engaged by the Participating Organisation (PO) shall at all times observe professional standards of integrity and fair dealing; and act honestly and in the best interest of their clients;
- no DR shall prior to obtaining written authorisation from a client, accept or act on any instruction received from any other person purporting to act on behalf of that client;
- no DR shall use a client’s account to trade for a third party;
- any Participant who, in any circumstances, directly or indirectly, being a DR, commits a breach of or violates any of the Rules, fails to perform his duties efficiently, honestly or fairly and unlawfully transacts on another person’s account shall be liable and be dealt with in accordance with the provisions of the Rules relating to the same; and
- a DR who, in any circumstances either directly or indirectly, divides or shares his remuneration or commission, as the case may be, with any person other than his PO and/or any other DR employed or engaged by the first-mentioned DR’s PO shall forthwith be struck off the Register by the Committee.
