The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Ang Kok Min for insider trading under Section 219(2)(a) of the Securities and Futures Act (SFA).
2 On 13 August 2010, Wilmar International Limited (Wilmar) announced its intention to purchase 20% of the share capital of Kencana Agri Limited (Kencana), a company listed on the Singapore Exchange Securities Trading Ltd (SGX-ST), at $0.35 per share. After the release of the announcement, Kencana’s share price closed at $0.385, a 10% increase over the preceding day’s closing price of $0.35.
3 Prior to the announcement, Mr Ang, a senior trading manager at Wilmar at that time, attended a meeting during which it was agreed that the investment by Wilmar into Kencana would be at an indicative price of $0.35 per Kencana share. Whilst in possession of the non-public price-sensitive information concerning Wilmar’s intention to invest in Kencana, Mr Ang bought 50,000 Kencana shares on 23 July 2010 and another 50,000 Kencana shares on 2 August 2010. As a result of his purchases, Mr Ang made a profit of approximately $6,200.
4 Mr Ang has admitted to contravening Section 219(2)(a) of the SFA and has paid MAS a civil penalty of $50,000, without any court action.
5 The matter was referred to MAS by SGX-ST.
Background
(A) The civil penalty regime
(i) 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.
(ii) 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 XII 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). Where the contravention did not result in the person gaining a profit or avoiding a loss, the civil penalty may be up to $2 million, subject to a minimum of $50,000.
(B) Insider Trading under section 219(2)(a) of the SFA
(i) Section 219(2)(a) prohibits a person who is in possession of materially price-sensitive information concerning a corporation (to which he is not connected), which he knows is materially price-sensitive and not generally available, from subscribing for, purchasing, selling, or entering into an agreement to subscribe for, purchase or sell those securities of that corporation.
