SINGAPORE: By purchasing shares of Wilton Resources near the close of trading hours, Mok Piak Liang managed to artificially inflate the share price of the gold exploration and mining firm by between 5.9 per cent and 22.8 per cent on 13 trading days in 2014.
Last year, Mok was sentenced to four months’ jail for false trading.
The conviction is one of the key outcomes of the enforcement actions taken by the Monetary Authority of Singapore (MAS) between July 2017 and December 2018 against breaches of its rules, the financial regulator said in its inaugural enforcement report on Wednesday (Mar 20).
Apart from this case, MAS also imposed S$16.8 million in fines and compositions on 42 financial institutions and S$698,000 in civil penalties for two insider trading cases and one case of unauthorised trading.
Over the same period, 19 prohibition orders, 37 reprimands, 223 warnings, 31 letters of advice and 444 supervisory reminders were issued to various individuals, companies and financial institutions.
Examples of these include penalties worth S$6.4 million imposed on Standard Chartered Bank Singapore and Standard Chartered Trust (Singapore) last year for anti-money laundering breaches, as well as prohibition orders served to individuals involved in offences related to Malaysian state fund 1MDB.
MAS said that the 1MDB review remains its most comprehensive anti-money laundering and countering the financing of terrorism (AML/CFT) review to date.
It has shut down BSI Bank and the Singapore branch of Falcon Private Bank and imposed S$30 million of fines on financial institutions, including on DBS, UOB and Standard Chartered Bank Singapore - though these do not fall under the enforcement actions laid out in this report as they were applied before July 2017.
“There are ongoing investigations into other financial institutions and individuals suspected of being involved in the 1MDB-related offences,” MAS added.
THREE FOCUS AREAS
In its report, MAS also revealed the average time taken to review and investigate a case.
Those involving criminal prosecutions took about 33 months on average, followed by 30 months for those with civil penalties, six months for regulatory actions and three months for referrals to external agencies. The average time taken across all concluded cases was about eight months, according to the report.
MAS said it focused on three key areas for enforcement, namely market abuse, financial services misconduct and money laundering-related breaches.
Financial services misconduct had the most number of outstanding cases as of end-December 2018.
Out of the 38 outstanding cases, more than half (20 cases) involved mis-selling, or cases involving suspected misrepresentation of financial products during sales or inappropriate advice of financial products given, the report showed.
There were 37 outstanding cases of market abuse offences as of end-December, with insider trading making up 38 per cent of the total, followed by false trading at 35 per cent, corporate disclosure at 22 per cent and fraud at 5 per cent.
For breaches related to money-laundering controls, MAS’ report noted it was looking at 13 outstanding cases as at the end of last year.
STRENGTHEN ENFORCEMENT EFFORTS
Among the initiatives to beef up its supervisory prowess, MAS said it has thus far tapped on data analytics to sharpen its AML/CFT monitoring and augmented intelligence to detect market manipulation.
The latter refers to Project Apollo – an augmented intelligence tool developed by the MAS last year to help enforcement officers assess and prioritise cases for investigation.
“After Apollo was developed, we tested it using past cases where investigations had been completed and market manipulation was found to have occurred,” said a MAS spokesperson who added that the tool has an accuracy rate of 98 per cent.
For this year and next, MAS will prioritise enforcement efforts in five areas to better protect consumers and safeguard public trust in Singapore’s financial institutions, it said.
These include strengthening the timeliness and adequacy of corporate disclosures by listed firms; business conduct of financial advisers and their representatives; financial institutions’ compliance with AML/CFT requirements; brokerage houses’ internal controls to detect and deter market abuse; and surveillance and investigations into suspected insider trading.
In 2016, MAS established a department to centralise enforcement functions across banking, insurance, capital markets and other regulated sectors. It followed up with an enforcement monograph last year, in which it explained how it selected matters for formal investigations and the investigative powers it has.
Wednesday’s inaugural report builds on the enforcement monograph, and will be published every 18 months. MAS said it hopes to provide greater accountability and transparency into the actions taken against breaches of Singapore’s rules and regulations.
“As Singapore’s financial industry grows in size and complexity, so will the risks of financial misconduct,” said MAS executive director of enforcement Gillian Tan in a media release.
“Enforcement plays a critical role in financial supervision through the detection, investigation and punishment of serious misconduct. This is intended to deter illegal and unethical behaviour and protect consumers.”