Civil Penalty Enforcement Action for Insider Trading

Singapore, 10 July 2008...The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Teo Chuan Teck for insider trading under Sections 218(2)(a) of the Securities and Futures Act (SFA).

2. The contraventions were in relation to Mr Teo’s purchases of securities of Cosco Corporation Singapore Limited (Cosco), a company listed on the Mainboard of the Singapore Exchange Securities Trading Ltd (SGX-ST), on five occasions between 15 January 2007 and 31 July 2007.  His purchases included over-the-counter (OTC) transactions in Contracts for Differences (CFDs) relating to the shares of Cosco.

3. Mr Teo was the Financial Controller of Cosco at the time and was in possession of non-public price sensitive information about Cosco.  These related to the securing of shipbuilding contracts by Cosco and Cosco’s financial results for FY2006, First Quarter FY2007 and Second Quarter FY2007.

4. Mr Teo has admitted to civil penalty liability for contravening Section 218(2)(a) of the SFA and will pay a civil penalty of S$320,000 to MAS without court action.  Mr Teo has cooperated fully during the course of MAS’ investigation.

5. Mr Shane Tregillis, Deputy Managing Director (Market Conduct), MAS, said, "MAS will take enforcement action against insider trading even where the dealings are transacted in OTC financial products, such as CFDs.  Individuals should not think that they can avoid detection by dealing in such products rather than in the listed securities themselves."

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Notes to Editor:

(A) Insider Trading under Sections 218(2)(a) of the SFA

Section 218(2)(a) of the SFA prohibits a person who is in possession of material price sensitive information concerning a corporation (to which he is connected), which he knows is material 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.

(B) Connected Person

Section 218(5) of the SFA provides that a person is connected to a corporation if – (a) he is an officer of that corporation or of a related corporation; (b) he is a substantial shareholder in that corporation or in a related corporation; or (c) he occupies a position that may reasonably be expected to give him access to information of a kind to which this section applies by virtue of – (i) any professional or business relationship existing between himself (or his employer or a corporation of which he is an officer) and that corporation or a related corporation; or (ii) being an officer of a substantial shareholder in that corporation or in a related corporation.

Section 218(6) of the SFA provides that for the purposes of Section 218(5), an officer in relation to a corporation includes (a) a director, secretary or employee of the corporation; (b) a receiver, or receiver and manager, of property of the corporation; (c) a judicial manager of the corporation; (d) a liquidator of the corporation; and (e) a trustee or other person administering a compromise or arrangement made between the corporation and another person.

(C) Contract for Differences

A CFD is an agreement to exchange the difference in value of a particular share between the time at which a contract is opened and the time at which it is closed.