Following investigations by the Commercial Affairs Department, two former trading representatives of Lim & Tan Securities Pte Ltd and one former trading representative of RHB Securities Singapore Pte Ltd (then known as DMG & Partners Securities Pte Ltd) were convicted on 14 September 2020 for unauthorised trading under Section 201 of the Securities and Futures Act, Chapter 289 (SFA).
The trio had pleaded guilty to two charges under Section 201(b) SFA each for unauthorised trading. David Luman James (David) was sentenced to imprisonment of three months and two weeks, while Wong Leng Pheng (Wong) and Tan Chye Kok (Tan) were sentenced to three months’ imprisonment each.
Between 18 September and 28 October 2013, David and Wong acted on the instructions of Goh Hanshi Justin (Goh) to use six and five accounts belonging to their family, friends and clients to buy and sell Skyone shares respectively. Tan also acted on Goh’s instructions to buy and sell Skyone shares between 11 October 2013 and 28 October 2013 using four accounts belonging to his family, friend and clients. These trades, which were carried out for Goh’s benefit, were done without the authorisation of the respective trading firms. Furthermore, David did not obtain consent from any of the account holders before placing Goh’s trades in their trading accounts while Tan failed to obtain consent from one of the account holders.
Most of the trades conducted by the three former trading representatives were done on a “contra” basis. Contra trading involves buying shares without paying the full price of the shares upfront. When Skyone share price fell drastically on 28 October 2013, Goh was unable to pay for the shares in these accounts due to the losses incurred.
Court proceedings against Goh are ongoing. He is facing one count of Section 197(1)(b) SFA for manipulating the price of Skyone shares, 27 counts of Section 201(b) SFA for conducting unauthorised trades in trading accounts belonging to third parties and another five counts of Section 420 of the Penal Code for cheating the two banks into disbursing funds for the purchase of Skyone shares. Court proceedings are also underway for three other persons, who are alleged to have been involved in Goh’s scheme to cheat two banks into disbursing funds for the purchase of Skyone shares.
SINGAPORE POLICE FORCE
16 September 2020 @ 10:15 AM