CIVIL PENALTY ENFORCEMENT ACTION FOR FALSE TRADING

Singapore, 28 November 2006...The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Teo Wen Shuen, Mr Foong Kim Wah and Mr Ng Cheng Hong for contravening the false trading provisions under Section 197(1)(b) of the Securities and Futures Act (SFA).  Mr Teo, Mr Foong and Mr Ng are trading representatives of Phillip Securities Pte Ltd.  The trades in question were conducted using their personal trading accounts.

2. On 10 February 2006, Mr Teo, Mr Foong and Mr Ng engaged in trading to deliberately depress the price of Olam International Ltd shares in order to profit from short-selling Olam covered warrants.  Mr Foong and Mr Ng first short-sold a large number of Olam covered warrants.  Mr Teo followed by selling Olam shares at progressively lower prices to push down the price of the shares. This resulted in a fall of the warrant price which enabled Mr Foong and Mr Ng to buy back the covered warrants at lower prices. They earned a net profit of $87,000 which was shared equally among the three persons.

3. Mr Teo, Mr Foong and Mr Ng have fully cooperated with MAS in the course of the investigation and have admitted to civil penalty liability for contravening section 197(1)(b) of the SFA.  They have each paid a civil penalty of $70,000 to MAS without court action. MAS has also suspended the Capital Markets Services representative licences held by Mr Teo, Mr Foong and Mr Ng for one year.

4. Mr Shane Tregillis, Deputy Managing Director (Market Conduct), MAS, said, "Trading with the intent to artificially affect the price of an underlying share so as to profit from the resulting change in the warrant price is not acceptable market practice. It undermines the integrity of the equity and derivatives markets. MAS will not hesitate to take action against anyone who engages in such activities."

5. This matter was referred to MAS by SGX-ST.  Civil penalty investigations were carried out by MAS according to standard operating procedures.

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 agreements with any person for that person to pay, with or without admission of liability, a civil penalty for a contravention of any provision of the SFA, Part XII, of a sum not exceeding three times the amount of the profit gained or loss avoided by that person, subject to a minimum of $50,000, where the contravention has resulted in the person gaining a profit or avoiding a loss.

(iii) In determining the quantum of civil penalties to seek in such actions, MAS takes into consideration all facts and circumstances relating to the contravention and the contravening person.

(iv) MAS takes into consideration the degree of seriousness of the misconduct, the extent of impact of the misconduct on the market, the need for effective deterrence and other relevant characteristics of the case when deciding to undertake civil penalty enforcement action.

(B) False trading under Section 197(1)(b) of the SFA

Under Section 197(1)(b) of the SFA, a person must not create or do anything that is intended or likely to create a false or misleading appearance with respect to the market or the price of securities.

***