MAS, CAD charge ex-remisier with financial fraud

A former remisier has been charged with financial fraud known as "spoofing".

Spoofing involves lodging fake bids to create the illusion of interest in a stock, either by cancelling similarly bogus offers in order to generate an air of pessimism, or placing orders in bad faith to create false optimism. The fraudster then hopes to cash in on the share's rise or fall.

Malaysian Dennis Tey Thean Yang, 32, faces 23 counts of breaching the Securities and Futures Act when he allegedly manipulated the stock prices of 17 listed companies, including GuocoLand and Asia Power Corp, by entering fraudulent buy and sell orders.

He allegedly did this in order to buy or sell financial derivatives known as contracts for differences (CFDs) in the 17 companies at prices he wanted. CFDs allow traders to punt on the direction of an underlying financial asset.

After he bought or sold the CFDs at artificial prices, he is said to have deleted the fraudulent orders for the stocks.

This is the first securities fraud case jointly brought by the Monetary Authority of Singapore (MAS) and the Singapore Police Force's Commercial Affairs Department (CAD).

The charges relate to a series of transactions between October 2012 and January 2013 through Tey's accounts with brokers IG Asia and CMC Markets Singapore.

The other stocks he allegedly targeted include China Aviation Oil, China Energy, China Flexible Packaging, China XLX Fertilizer, Delong Holdings, Li Heng Chemical Fibre Tech, Pan Hong Property Group, Sinostar Pec Holdings, Full Apex Holdings, Samudera Shipping Line, Bund Center Investment, ECS Holdings, Manhattan Resources, Pacific Century and World Precision Machinery.

At the same time, he was using proxy trading accounts of four people - Gan Siew Len, Tey Ser Thong, Theng Boon Ping and Abdul Hakeem Abdul Azeez -at IG Asia, DBS Vickers Securities, DMG & Partners and CMC Markets to conduct trades in these stocks or CFDs without informing or getting consent from the brokerages.

Teh, who is out on agency bail, declined to comment yesterday.

He could be jailed for up to seven years and fined up to $250,000 for each charge, or both.

The charges are the first joint effort by the regulator and the CAD, since coming together in March last year to investigate market misconduct.

Mr Robson Lee, a partner at Gibson, Dunn & Crutcher, noted: "Singapore's corporate crime busters are determined to send the unequivocal signal that any offender of our securities laws will be firmly dealt with, with no exception."

The joint investigation effort consolidates resources and expertise and gives MAS officers the same criminal powers of investigation as CAD officers.

This article was first published on July 23, 2016.
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