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Three men jailed for insider trading involving front-running in first such case in Singapore
SINGAPORE — Three men were jailed on Wednesday (10 July) for insider trading involving front-running in the first such case to be prosecuted in Singapore.
Leong Chee Wai, E Seck Peng Simon, and Toh Chew Leong were charged with a total of 333 counts of insider trading offences, the Monetary Authority of Singapore (MAS) said in a statement.
The three men had carried out a front-running scheme over seven years which resulted in total profits of $8.07 million, MAS said. Front running involves buying or selling a security using advance information of pending orders to wrongfully benefit from the trade.
Leong, E and Toh were jailed 36 months, 30 months and 20 months, respectively.
The State Court also ordered $310,000, $770,000 and $1,350,000 be forfeited to the state from Leong, E and Toh, respectively.
Under the front-running scheme, Leong and E made profits of about $2.7 million each, while Toh’s profit was about $2.4 million.
Leong and Toh were senior equity dealers with First State Investments Singapore (FSIS) tasked to execute trading orders placed by FSIS’ portfolio managers. E was a remisier with UOB Kay Hian.
From March 2007, Leong and E colluded to profit from price-sensitive confidential information Leong had on orders that FSIS intended to make. E would then use his personal trading account to place orders in the same counters, ahead of FSIS’ orders, thus “front-running” FSIS’ orders.
As FSIS’ orders typically involved large quantities of shares, the orders had a significant impact on market prices. When a share price rises on FSIS’s orders, E would sell his stocks, and share the profits equally with Leong.
Toh, who joined the FSIS’ dealing desk in July 2004, subsequently joined the pair in the front-running arrangement from August 2008. The profits made from the insider trading were then split equally among the three men.
In addition, Toh and E had used information on FSIS’ intended orders to trade in contract for differences (CFDs) on the counters listed in the orders. The CFD trades were carried out in the duo’s trading accounts and the profits kept for themselves. Toh and E made insider trading profits of $273,398 and $59,492 respectively.
The MAS seeks to impose Prohibition Orders (POs) on Leong and E for 15 years, and Toh for 13 years. The POs take into account the duration of misconduct, and the amount of illicit profits made and surrendered.
