By Michelle Tay

THE first civil suit the Monetary Authority of Singapore (MAS) has ever filed kicked off yesterday with a former senior executive facing insider trading charges.

Previous cases of alleged insider trading have resulted in fines imposed after the individuals admitted to the civil penalty liability for contravening the Securities Futures Act (SFA).

In this case, MAS is suing a former employee of WBL Corporation - the first time the central bank has acted as the plaintiff in a lawsuit.

Legal documents filed by MAS lawyers at Drew & Napier stated that the case is 'simple but raises a matter of significant public policy'.

The main issue centres on whether an employee in a senior management position can trade in the firm's shares after attending internal meetings that present price-sensitive information.

Court documents say Mr Kevin Lew Chee Fai, former general manager of enterprise risk management at WBL, sold 90,000 WBL shares at $4.98 per share on July 4, 2007.

He was said to have obtained information at a group management council meeting two days earlier, on July 2, that WBL was forecast to make a loss for the third quarter.

The firm was projecting a quarterly net loss and impairment costs on its subsidiaries. It presented this information on 'Powerpoint slides prepared by WBL's finance department', said MAS.

It also claims this information would not have been publicly available until Aug 14, 2007, when the company announced its third-quarter results.

By selling his shares earlier, Mr Lew not only avoided incurring a loss of approximately $27,000, he also made a profit of $446,773, according to court documents.

After WBL reported a net loss of $27.3 million on Aug 14, 2007, WBL shares fell 10 cents, from $4.78 that day to $4.68 on the next trading day.

Mr Lew has denied any breach and maintains 'the Powerpoint slides prepared by WBL (were) never distributed to the attendees of the July 2, 2007 group management council meeting'.

He adds that the meeting was 'a financial forecast meeting', with 'extremely preliminary' forecasts for June 2007 that 'could not be reasonably relied on'.

He also denies being in possession of price-sensitive information that would have 'a material effect on the price or value of WBL shares'.

Calling Mr Lew 'egregious', MAS said he had been 'expressly advised by (WBL's) in-house counsel not to sell his shares in light of the price-sensitive information shared at the meeting'.

This article was first published in The Straits Times.