Singapore, 11 April 2012, The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Lau Kee Swan for contravening section 201(b) of the Securities and Futures Act (SFA), which prohibits the employment of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities.
2 Mr Lau had knowingly:
(a) opened securities trading accounts with various brokerage houses for the purpose of trading on behalf of a third party; and
(b) conducted trades in those accounts for the benefit of the third party.
Mr Lau’s dealings with these brokerage houses had led them to believe that the accounts were opened and operated for Mr Lau himself.
3 Mr Lau has admitted to contravening section 201(b) of the SFA and will pay a civil penalty of $50,000 to MAS without court action. Mr Lau has cooperated fully with MAS in the course of the investigations.
4 Mr Lee Chuan Teck, Assistant Managing Director for Capital Markets, MAS, said: "Account holders should not allow their accounts to be operated for the benefit of third parties, while giving the brokerage house the false impression that the trades belong to the account holders. This practice undermines the integrity of our capital markets and prevent them from functioning in a fair, orderly and transparent manner.”
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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 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 Part XII of the SFA, of a sum not exceeding
- three times the amount of the profit gained or loss avoided by that person, subject to a minimum of either $50,000 (if the person is not a corporation) or $100,000 (if the person is a corporation); or
- (where the contravention has not resulted in the person gaining a profit or avoiding a loss) $2 million, subject to a minimum of $50,000.
(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.
(B) Employment of Manipulative and Deceptive Devices 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.
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