MAS penalizes trading representative for false trading

Tan Tan Wee Kiat Melvin paid $50,000 and had his licence suspended for three months.

The Monetary Authority of Singapore (MAS) has taken civil penalty enforcement action against Mr Tan Wee Kiat Melvin for contravening the false trading provisions under section 197(1)(b) of the Securities and Futures Act (SFA). Mr Tan is a trading representative of CIMB-GK Securities Pte Ltd, according to a MAS report.

On 11 August 2009, Mr Tan placed four sell orders for a total of 275,000 Singapore Petroleum Company Ltd shares in the last five minutes prior to the close of the trading session, with no intention to fulfill the orders. Instead, Mr Tan’s intention was to create the appearance of a large supply of shares on sale in the market and thereby discourage potential sellers from placing further sell orders. Seconds before the close of the trading session, Mr Tan deleted three of the sell orders. By discouraging potential sellers from entering further sell orders, Mr Tan sought to achieve a higher selling price for his remaining sell order than what he may otherwise have been able to achieve. The profit earned from the trades was approximately $3,800.

Mr Tan has fully cooperated with MAS in the course of the investigation and has admitted to civil penalty liability for contravening section 197(1)(b) of the SFA. He has paid a civil penalty of $50,000 to MAS without court action. MAS has also suspended the Capital Markets Services representative licence held by Mr Tan for three months.

Mr Leo Mun Wai, Assistant Managing Director (Capital Markets), MAS, said, "The entry and deletion of orders with intent to artificially raise or depress the closing price of securities distorts the market and undermines its efficiency because the closing price would not reflect the forces of genuine supply and demand. This is prohibited under our securities law. MAS will not hesitate to take action against anyone who engages in such conduct.”