MAS takes Civil Penalty Enforcement Action against Ang Choon Cheng for Contravening Law against False Trading and Employment of Manipulative and Deceptive Devices
Singapore, 31 October 2013… The Monetary Authority of Singapore (MAS) has taken civil penalty action against Mr Ang Choon Cheng for contravening section 197(1)(b) of the Securities and Futures Act (SFA) by carrying out purchases which were intended to create, and which created, a false or misleading appearance with respect to the price of securities, as well as section 201(b) of the SFA, which prohibits the employment of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities.
2 Mr Ang was an executive director of Natural Cool Holdings Ltd (Natural Cool) when the contraventions took place. Mr Ang had pledged Natural Cool shares to financial institutions for financing purposes. On 35 days between 9 January 2008 and 16 June 2009, Mr Ang bought Natural Cool shares to maintain or raise the price of Natural Cool shares so as to prevent margin calls. As a result of the purchases, Natural Cool shares closed as much as 12 bids, or 30%, above the preceding traded price. Through his actions, Mr Ang intended to create, and created a false or misleading appearance with respect to the price of Natural Cool shares.
3 Mr Ang had carried out the purchases, as well as two sale transactions in Natural Cool shares, using the securities trading accounts maintained by two other persons with the same brokerage house. Mr Ang’s actions had deceived the brokerage house into believing that the purchases and sales were for the benefit of the respective account holders when he was in fact the beneficial owner of those trades.
4 Mr Ang cooperated fully with MAS in the course of the investigation, and has paid a civil penalty of $150,000 to MAS without court action, comprising a civil penalty of $90,000 for contravening section 197(1)(b) of the SFA and $60,000 for contravening section 201(b) of the SFA. Mr Ang has resigned as a director and Chief Executive Officer of Natural Cool on 31 October 2013. Mr Ang has also given a voluntary undertaking to MAS not to be a company director for a period of one year with effect from 31 October 2013.
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,
(a) 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 $100,000 (if the person is a corporation) or $50,000 (if the person is not a corporation); or
(b) (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.
(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) 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 for, or the price of, securities.
(C) 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.