MAS Takes Civil Penalty Enforcement Action against Mr Pu Weidong and Triumpus Assets Management Pte Ltd for Insider Trading
Singapore, 3 May 2016… The Monetary Authority of Singapore (MAS) has taken civil penalty action against Pu Weidong (Pu) and Triumpus Assets Management Pte Ltd (Triumpus) for insider trading in the shares of Sinomem Technology Ltd (Sinomem).
2 Pu was the Chief Financial Officer in Sinomem when the contraventions took place. Pu is also the sole director and shareholder of Triumpus.
3 Between 2 and 27 March 2009, Pu and Triumpus purchased 4,605,000 Sinomem shares when Pu possessed confidential price-sensitive information concerning a proposed share buyback offer by Sinomem, which was subsequently announced on 27 March 2009. Pu and Triumpus made a profit of S$49,542 on these insider trades.
4 Between 25 and 31 August 2009, Pu and Triumpus sold 14,174,000 Sinomem shares when Pu possessed knowledge of confidential, price-sensitive information on a proposed placement of shares by Sinomem. Information on the proposed share placement was subsequently announced on 9 September 2009. Pu and Triumpus did not make any profit or avoid any loss on these trades.
5 On 26 February 2015, MAS commenced a civil penalty action in the State Court of Singapore (DC Suit No. 586 of 2015) against Pu and Triumpus for insider trading in Sinomem’s shares under the Securities and Futures Act (SFA).
6 Pu and Triumpus have admitted to contravening sections 218(2)(a) and 219(2)(a) of the SFA, and will pay to MAS a civil penalty of S$316,000, as well as S$61,610.75 for the legal costs and disbursements incurred by MAS for the civil penalty action. Pu has also given a voluntary undertaking not to be a company director or be involved in the management of a company for a period of one year with effect from 3 July 2016.
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(1) of the SFA, whenever it appears that any person has contravened any provision in Part XII of the SFA, MAS may, with the consent of the Public Prosecutor, bring an action in a court against him to seek an order for a civil penalty in respect of that contravention. If the court is satisfied on a balance of probabilities that the person has contravened a provision in this Part which resulted in his gaining a profit or avoiding a loss, the court may make an order against him for the payment of a civil penalty of a sum not exceeding:
(a) 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) Notwithstanding the above, MAS may also 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.
(B) Insider Trading under Section 218(2)(a) and Section 219(2)(a) of the SFA
Section 218(2)(a) of the SFA prohibits a person who is in possession of materially price-sensitive information concerning a corporation (to which he is connected), which he knows is materially price-sensitive and not generally available, from (whether as principal or agent) subscribing for, purchasing, selling, or entering into an agreement to subscribe for, purchase or sell those securities of that corporation.
Section 219(2)(a) of the SFA prohibits a person who is in possession of materially price-sensitive information concerning a corporation (to which he is not connected), which he knows 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.
(C) Connected Person
Section 218(5) of the SFA provides that a person is connected to a corporation if, amongst others, he occupies a position that may reasonably be expected to give him access to information of a kind to which Section 218 applies by virtue of 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.