Singapore, 30 November 2017… The Monetary Authority of Singapore (MAS) has taken civil penalty action against Mr Tarek Abdel Tawab Mohamed Abdel Bary (Tarek Bary) for insider trading in the shares of CSE Global Limited (CSE Global).

2   Tarek Bary has admitted to contravening section 218(2)(a) of the SFA, and will pay MAS a civil penalty of S$423,000.00. In addition, Tarek Bary will pay MAS S$61,457.90 for the legal costs and disbursements incurred for the civil penalty action.  Tarek Bary 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 two years with effect from 18 December 2017.

3   Mr Lee Boon Ngiap, Assistant Managing Director (Capital Markets), MAS, said, “MAS does not tolerate any form of insider dealing. Any individual who has access to material non-public information should not trade in the company’s shares. Listed companies are reminded to ensure that parties who have access to confidential and price-sensitive information are fully aware of their obligations under the law.”

Background of the case

4   On 11 August 2011, CSE Global reported a loss of S$7 million in its 2011 second quarter results. The loss was due to cost overruns in relation to four projects undertaken by CSE Global, including two projects in Saudi Arabia (Saudi Projects). Following the disclosure, the price of CSE shares fell by 13.9%. 

5    At the time, Tarek Bary was the Managing Director of CSE-Transtel Pte Ltd (CSE-Transtel), a wholly owned subsidiary of CSE Global. On 8 April 2011, prior to CSE Global’s announcement of its second quarter results, Tarek Bary sold 500,000 CSE Global shares while in possession of non-public, price-sensitive information concerning the cost overruns for the Saudi Projects.  The sale of the shares allowed Tarek Bary to avoid a loss of S$168,955.

6   On 1 March 2017, MAS commenced a civil penalty action in the State Courts of Singapore against Tarek Bary for insider trading in CSE Global’s shares under the Securities and Futures Act (SFA).

7   On 27 November 2017, Tarek Bary agreed to settle the matter out of court with MAS.

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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.

(B) Insider Trading under Section 218(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.

(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.