On 23 May 2025, Gan Hsiao Ping Calvin (“Gan”) was sentenced to 18 weeks’ imprisonment and a fine of $20,000 after a trial. He was convicted of the following offences on 9 April 2025:
- Three charges under Section 197(1)(b) of the Securities and Futures Act, Cap 289 (“SFA”) for false trading; and
- One charge under Section 201(b) SFA for unauthorised trading.
Gan’s conviction was a result of a joint investigation carried out by the Commercial Affairs Department of the Singapore Police Force and the Monetary Authority of Singapore, following a referral from the Singapore Exchange Regulation Pte Ltd.
Background of case
Between 18 September 2015 and 16 December 2015, Gan engaged in a course of conduct for the purpose of creating a false appearance with respect to the market for securities of three counters listed on the Singapore Exchange, namely Versalink Holdings Limited, Kingboard Copper Foil Holdings Limited and Innotek Limited. He did so by entering and deleting a series of buy and sell orders at prices and volumes that he did not intend to transact at, to create the illusion of buying and selling interest in these securities.
Sometime in the second half of 2015, Gan discovered that a trading algorithm used by Merrill Lynch International (Merrill Lynch) was willing to enter better priced orders once he got the algorithm to react to his orders (i.e. the algorithm would enter buy orders at higher prices, and sell orders at lower prices). He then began to actively look for the Merrill Lynch algorithm across the three counters and strategised to trade against it.
Gan’s trading strategy involved layering and spoofing to manipulate the spread in the three counters. He would enter layered orders, namely fraudulent orders at various price levels on the buy side (bid), the sell side (ask) or both, creating the illusion of buying and selling interest in the market for the securities. This resulted in an artificial narrowing of the market spread between the priority bid/ask prices, allowing Gan to induce the Merrill Lynch algorithm to respond with better priced orders. After Gan executed trades with the Merrill Lynch algorithm’s better priced orders, he deleted the fraudulent orders which did not cause the Merrill Lynch algorithm to respond as did not intend for these orders to be fulfilled by other market participants. By executing this strategy, Gan was able to earn quick profits through buying securities at lower prices from, and selling them at higher prices to, the Merrill Lynch algorithm.
Apart from using the above strategy in two of his trading accounts, Gan conducted some fraudulent trades using his father’s trading account maintained with RHB Securities Singapore Private Limited without the firm’s requisite consent.
Using his strategy over 37 trading days, Gan executed 2,759 fraudulent trades with the Merrill Lynch algorithm and made profits totalling $16,361.40.
In sentencing the accused, the Court found that the accused had actively traded illiquid stocks where the number of trades and the quantity bought and sold for the three securities was high. The accused also engaged in calculated behaviour and made a significant sum of profits. Although the accused made late disgorgement of his gains, balancing this against the harm and culpability factors, the custodial threshold was crossed.
SINGAPORE POLICE FORCE
27 May 2025 @ 3:20 PM