AmFraser wins suit to recover $1.9m from ex-client

A man standing in the AmFraser Securities office at the Singapore Exchange Centre on 24 October 2013.
PHOTO: The Straits Times

Stockbroking firm AmFraser Securities has won its court fight to recover $1.9 million from a former customer who racked up trading losses in the October 2013 penny stock crash.

Mr Goh Chengyu, 32, had refused to pay the debt, alleging that he is not liable as the trades were carried out without his authorisation.

AmFraser argued that from the time he set up the trading account, Mr Goh had authorised his cousin, Mr Adrian Goh, and his cousin's friend, Mr Lincoln Lee, to trade on his behalf.

In a 107-page written judgment released this week, the High Court agreed with AmFraser that Mr Goh had been a "front" for his cousin and later, Mr Lee. The trades were authorised or consented to by Mr Goh, Justice Geoge Wei concluded.

The disputed trades - purchases of 600,000 Blumont, 250,000 Asiasons and two million IHC shares - took place on Oct 2 and 3, 2013.

On Oct 4, the prices of Blumont and Asiasons collapsed, and their trading was suspended by the Singapore Exchange.

Several days later, Mr Goh sold these counters at a loss.

In January 2014, AmFraser Securities, since renamed KGI Fraser Securities following an acquisition by Taiwan's KGI Securities, sued Mr Goh to recover the losses.

Mr Goh is a project manager at a subsidiary of public-listed property developer Wee Hur Holdings, co-founded by his father.

He said he had nothing to do with the four trades that resulted in the huge loss; he was overseas and returned only on Oct 5.

He said he was "horrified" to learn of the unauthorised trades when his father, who opened his mail, told him about a contract statement relating to the Oct 2 trades.

AmFraser, represented by Mr Danny Ong, argued that the four trades had been placed by Mr Lee with Mr Goh's knowledge and consent.

Mr Goh's trading representative, Mr Heng Gim Teoh, had testified that it was Mr Adrian Goh who had approached him to open a trading account for Mr Goh.

Mr Heng said he met Mr Goh only once and that it was Mr Adrian Goh and Mr Lee who phoned him to place orders. Losses were also settled by the pair, he said.

Mr Goh insisted he had been directly giving trading instructions to Mr Heng .

Justice Wei noted that Mr Goh had been inconsistent about his mode of communication with Mr Heng, and was also vague on his trading activities and uncertain about the profits he had made.

Justice Wei noted that after the penny stock crash, Mr Goh did not contact Mr Heng but left it to his uncle - Mr Adrian Goh's father - to resolve the matter.

This article was first published on Dec 30, 2016.
Get a copy of The Straits Times or go to for more stories.