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Trading representatives fined, suspended for market manipulation

This article is more than 12 months old

Five trading representatives were fined and suspended last year after they created a false market in the shares of five listed companies.

Three of the representatives were working for CIMB Securities, one was from OCBC Securities, and the fifth was from RHB Securities.

The manipulative transactions were designed to artificially elevate the prices or trading volumes of the shares.

The three CIMB representatives were penalised for trades involving China-based retail store operator Zhongmin Baihui Retail Group, while two had traded in Far East Group, PNE Micron Holdings, 8Telecom International and Halcyon Agri Corp, the Singapore Exchange (SGX) disclosed on Friday.

A false market arises when the normal forces of supply and demand are disrupted, which in turn distorts the price and trading volumes of a stock.

Mr Lim Kok Tong, Mr Yeo Lay Hoon and Mr Lim Pei Woon were sanctioned for creating a false market in Zhongmin Baihui shares by engaging in manipulative transactions among their clients for eight months to artificially maintain the stock price.

The trades accounted for 90 per cent of the traded volume at prices between $1.825 and $1.840 a share.

This resulted in a "Trade with Caution" alert being placed on the stock on Feb 5 last year.

Mr Lim Kok Tong was also a founding member of Zhongmin Baihui, which was incorporated here in 2004.

He was fined $180,000 and suspended for six months with effect from Oct 27 last year.

Mr Yeo and Mr Lim Pei Woon were each fined $35,000 and suspended from trading for three months with effect from Aug 30 last year.

Mr Fairuz Gunn, CIMB head of retail equities, said yesterday: "One of them has resumed duties, while the second is still suspended. A third has since ceased employment with CIMB."

The SGX told The Straits Times: "The fine and suspension imposed on Lim Kok Tong is the biggest punishment for market manipulation for a single proceeded charge."

In the second case, Mr Alex Kok Wei Jian of OCBC Securities and Mr Marvin Ang Kok Pin of RHB Securities created a false appearance of active trading in various securities between Feb 16, 2015 and May 9, 2016.

Both were found to have made pre-arranged trades for 10 months to prevent their member firms from force-selling their clients' positions in several securities.

The volume of the trades accounted for as much as 96 per cent of the market volume on some days.

Mr Kok was fined $70,000 and suspended for three months, while Mr Ang was fined $60,000 and suspended for two months. Both suspensions were backdated to Aug 29 last year.

A spokesperson from RHB Securities said: "RHB was notified by SGX of its investigation on Mr Ang and took immediate action to suspend his trading access with us during the investigation period."

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