Singapore, 8 March 2017… The Monetary Authority of Singapore (MAS) has successfully obtained a civil penalty judgment against Mr Wang Boon Heng (Wang) and Ms Foo Jee Chin (Foo) for contravening section 201(b) of the Securities and Futures Act (SFA), which prohibits any conduct that operates as a fraud or deception in connection with the subscription, purchase or sale of securities. This case was referred to MAS by the Singapore Exchange Securities Trading Ltd.

2   At the material times, Wang and Foo were divorced and Wang was an undischarged bankrupt.  Between 3 September 2007 and 27 December 2007, Wang carried out share trading for his own benefit in the accounts opened in Foo’s name with DMG & Partners Pte Ltd (DMG) and UOB Kay Hian Pte Ltd (UOBKH). Between 19 September 2007 and 28 December 2007, Wang also carried out share trading for his own benefit in accounts opened in the name of another person with DMG and UOBKH.

3   DMG and UOBKH did not know that the trades in the above-mentioned accounts were carried out for Wang’s benefit, and not for the benefit of the named account holders.  DMG and UOBKH did not authorise nor give consent to Wang to trade in the accounts for his own benefit.  In doing so, Wang had intentionally deceived DMG and UOBKH. 

4   By allowing Wang to trade in her DMG and UOBKH accounts without obtaining the authorisation and/or consent of DMG and UOBKH, Foo had also intentionally deceived DMG and UOBKH. 

5   On 5 December 2013, MAS commenced a civil penalty action in the State Courts of Singapore (DC Suit No. 2648 of 2013) against Wang and Foo for contravening section 201(b) of the SFA.

6   On 14 December 2016, the Court ruled that Wang and Foo had contravened section 201(b) of the SFA and on 8 March 2017, further ordered that Wang and Foo pay a civil penalty of S$75,000 and S$50,000 respectively, as well as S$58,636.23 for the legal costs and disbursements incurred by MAS for the civil penalty action.   

7   In addition to the civil penalty action, MAS has also issued a warning letter to the second account holder for contravening section 201(b) of the SFA for allowing Wang to trade in his accounts for Wang’s benefit. MAS took into account his full cooperation when deciding on the appropriate action to take.

8   Mr Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS, said: “This civil penalty action reflects MAS’ firm stance against unauthorised share trading, which is a deception against broking firms that are unaware of the beneficial owner behind the trades. Such behaviors carry regulatory risks as perpetrators of insider trading and market manipulation often hide behind nominee accounts.”

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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(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.

(iv) In determining the quantum of civil penalties, the Court takes into consideration all facts and circumstances relating to the contravention and the contravening person.

(v) 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 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.