The Monetary Authority of Singapore (MAS) has imposed civil penalties against four individuals, Mr Aw Yong Leon Heng, Mr Neo Say Hwee, Mr Chang Bing Quan Daryl, Mr Cheng Jia Hong, and a trading representative Mr Tan Keng Cheng, for abetting Mr Lim Tiong Hian1 in false trading and the related unauthorised use of trading accounts under the Securities and Futures Act (SFA). These enforcement actions are a result of a joint investigation conducted by MAS and the Commercial Affairs Department (CAD) of the Singapore Police Force, following a referral from the Singapore Exchange Securities Trading Limited.
2 From January to May 2019, Mr Lim approached three friends – Mr Aw Yong, Mr Neo and Mr Chang – to trade in the shares of Epicentre Holdings Limited (Epicentre). Mr Neo subsequently approached Mr Cheng to engage in the same trading activity. The quartet falsely raised the price of Epicentre shares from $0.085 to $0.104, and falsely maintained the price of Epicentre shares, on behalf of Mr Lim.
3 In addition to placing the false Epicentre trades in their personal trading accounts, Mr Neo and Mr Chang also provided their login credentials to Mr Aw Yong, for Mr Aw Yong to access their trading accounts online to similarly place false trades in Epicentre. Mr Neo and Mr Cheng allowed Mr Aw Yong to place the trades in their accounts through their trading representative, Mr Tan, without formal third-party authorisation. In this regard, Mr Tan deceived the brokerage house into believing that Mr Neo and Mr Cheng had instructed Mr Tan to place the Epicentre trades, and were the beneficial owners of the traded shares, when Mr Tan knew that the instructions were from Mr Aw Yong.
4 The five individuals have admitted to contraventions of the SFA and have paid the following civil penalty amounts to MAS as part of settlement agreements:
a. Mr Aw Yong, $150,000 for abetment of false trading and unauthorised trading;
b. Mr Neo, $100,000 for abetment of false trading, abetment of unauthorised trading, and unauthorised trading;
c. Mr Chang, $75,000 for abetment of false trading, abetment of unauthorised trading and unauthorised trading;
d. Mr Tan, $65,000 for unauthorised trading ; and
e. Mr Cheng, $50,000 for unauthorised trading
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- Mr Lim, also known as Kenneth Lim, is the former Chairman of Epicentre Holdings Limited.
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Additional Information
(A) The civil penalty regime
A civil penalty action is not a criminal action and does not attract criminal sanctions. The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004.
Under section 232 of the SFA, MAS may enter into an agreement with any person for that person to pay, with or without admission of liability, a civil penalty for contravening any provision of Part 12 of the SFA. The civil penalty may be up to three times the amount of the profit gained or loss avoided by that person as a result of the contravention, subject to a minimum of $50,000 (if the person is not a corporation) or $100,000 (if the person is a corporation)
(B) False trading under section 197(1)(b) of the SFA
Under section 197(1)(b) of the SFA, no person shall do any thing, cause any thing to be done or engage in any course of conduct, if his purpose, or any of his purposes, for doing that thing, causing that thing to be done or engaging in that course of conduct, as the case may be, is to create a false or misleading appearance with respect to the market for, or the price of, securities.
(C) Unauthorised trading under section 201(b) of the SFA
Under section 201(b) of the SFA, no person shall, directly or indirectly, in connection with the subscription, purchase or sale of any securities engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person.
(D) Abetment under Section 109 of the PC
Under section 109 of the PC, whoever abets any offence shall, if the act abetted is committed in consequence of the abetment, and no express provision is made by the PC for the punishment of such abetment, be punished with the punishment provided for the offence.
