Traders questioned on alleged breaches of securities law

Several local remisiers are being questioned by the financial authorities over alleged breaches of the securities law after a series of raids on at least four brokerages this week.

The market is abuzz with speculation on what sparked the raids, who are being questioned, and which stocks are involved in the probe.

Remisiers are licensed stock trading representatives attached to - but not employed by - brokerages.

The last time a major raid took place was in 2014 over alleged trading irregularities surrounding the October 2013 penny stock crash.

Officials from the Monetary Authority of Singapore (MAS) and Commercial Affairs Department (CAD) visited DBS Vickers, Maybank Kim Eng, OCBC Securities and Phillip Securities starting on Monday and obtained documents and other items from them and some trading representatives.

DBS Vickers told The Straits Times yesterday it believes the brokerage is not under investigation.

An OCBC Bank spokesman also said OCBC Securities is not under investigation, adding: "A remisier, who is not an employee, is assisting with investigations. No OCBC Securities employees are involved."

A source close to the brokerage said the authorities on Wednesday took the personal belongings of the remisier, including his mobile phone and laptop, but the brokerage's property was not confiscated as part of the probe.

Maybank Kim Eng issued a similar statement: "Based on the information available to us, Maybank Kim Eng Securities itself is not the subject of these investigations." Phillip declined comment.

When asked for further details yesterday, an MAS spokesman said yesterday: "As a matter of policy, MAS does not comment on its supervisory dealings with specific financial institutions."

In a statement yesterday, the Singapore Exchange said it had reported several cases related to alleged insider trading and market manipulation. "In the January to March quarter, we referred nine cases to MAS of which three were related to insider trading and six to market manipulation," SGX said.

The MAS has yet to disclose publicly which companies or counters their probe is focusing on.

However, there has been a wave of trading cautions issued in the last six months on firms whose share prices behaved erratically.

A source with direct knowledge of the matter said the authorities on Wednesday visited Maybank Kim Eng and took some documents.

Market sources said at least one remisier from DBS Vickers, along with one other from OCBC Securities, were also questioned over alleged manipulation of stocks.

A trader at Phillip said several CAD officers "spent around an hour" at the computer of a trading representative, a veteran of more than 10 years. "I'm not sure whether he was taken away for investigation - but I haven't seen him in days."

"One speculation on the floor is that the CAD is cracking down on a 'pump and dump' syndicate, where a group of remisiers rotate the shares around themselves to inflate the price. That was what happened during the penny crash, and in recent months there were quite a number of counters flagged for irregular volume and prices."

The remisiers involved are said to have worked in the industry for some years now; some drive flashy sports cars, including Ferraris, to work.

Gibson Dunn partner Robson Lee said the MAS and CAD typically conduct joint raids when they "receive information showing that market misconduct may have been committed, and that there is a reasonable basis to believe that certain persons or entities are in possession of important evidence relating to any such offence which must be expeditiously secured".

Additional reporting by Wong Wei Han

This article was first published on April 23, 2016.
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