MAS takes Civil Penalty Action and issues Prohibition Order against Koh Huat Heng for Insider Trading

Singapore, 20 May 2014… The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Koh Huat Heng for insider trading under Section 219(2)(a) of the Securities & Futures Act (SFA).

2   Mr Koh was a relationship manager and a Team Head in the Affluent Banking Unit of Malayan Banking Bhd (Singapore branch) (Maybank). On 18 June 2013, he purchased 140,000 shares in Sin Heng Machinery Limited (Sin Heng), a company listed on the Singapore Exchange Securities Trading Ltd, while in possession of non-public and price-sensitive information concerning Sin Heng’s intention to undertake a rights issue exercise. Mr Koh had obtained this information in the course of his work at Maybank.

3   Subsequently, on 26 June 2013, Sin Heng announced its intention to undertake the rights issue of up to 114,805,000 new ordinary shares at an issue price of S$0.16 per rights share, on the basis of one rights share for every four existing ordinary shares held by the shareholders of the company.

4   Mr Koh 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. MAS has also issued an order under section 59(1)(bb) of the Financial Advisers Act, prohibiting Mr Koh from (i) providing any financial advisory service, and (ii) taking part, directly or indirectly, in the management of, acting as a director of, or becoming a substantial shareholder of a licensed financial adviser or exempt financial adviser, for a period of 3 years.

5   Mr Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS, said: “MAS expects a person who has been appointed as a representative of a financial adviser to act honestly and with integrity, especially in relation to the information that he obtains in the course of his work. To maintain the public’s confidence in our financial services sector, we will take firm action against any representative who fails to do so.”

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Notes to Editor

(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

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 or ought to know 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.

Last Modified on 26/11/2016