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Former CGS-CIMB broker jailed for manipulating Koyo shares

Former CGS-CIMB broker jailed for manipulating Koyo shares

Source: Business Times
Article Date: 16 Oct 2020
Author: Rae Wee

Lau Wan Heng, 62, was sentenced to 20 months' imprisonment for one count of engaging in a course of conduct which she knew would be likely to create a false or misleading impression of active trading in the shares under Section 197(1A)(a) of the SFA.

A former CGS-CIMB Securities employee will do jail time for her involvement in manipulating trading in the shares of Catalist-listed Koyo International between August 2014 and January 2016.

Lau Wan Heng, 62, was sentenced to 20 months' imprisonment for one count of engaging in a course of conduct which she knew would be likely to create a false or misleading impression of active trading in the shares under Section 197(1A)(a) of the Securities and Futures Act (SFA).

She was also found guilty on 12 counts of unauthorised trading under section 201(b) of the SFA, for which she was handed another 18 weeks' jail. Some of these sentences will run consecutively, and others, concurrently.

Another 19 charges were taken into consideration in the sentencing.

Lau, who begins her sentence on Oct 29, was initially a broker and later a remisier at the brokerage firm.

She was part of an alleged multi-member scheme that was said to have artificially pushed up the share price of Koyo, a provider of integrated mechanical and electrical engineering services, during the period.

Alleged mastermind Lin Eng Jue, 43, was introduced to Lau by the Koyo chief executive in January 2015, when he then asked for Lau's assistance in the scheme.

Between February 2015 and October the same year, Lau approached nine of her clients at CGS-CIMB, and convinced them to allow her to use their trading accounts to trade Koyo shares. She then performed trades from February till January the following year.

She also convinced her brother and his wife to hand over three of their trading accounts for the same purpose, though her brother executed the trades directly.

Those who provided their trading accounts were promised a commission of 10 per cent from profits made through their accounts. They were told that any losses incurred would be paid by the scheme members.

In the final phase of the scheme between October 2015 and January 2016, Lau obtained more trading accounts to be used, after earlier informing her clients that she was considering leaving CGS-CIMB to join either RHB or KGI Securities. This came after she realised that CGS-CIMB was restricting her credit limits.

She then told her clients - with the exception of her brother - that she was leaving due to "work issues".

As a result, her CGS-CIMB clients opened or re-activated a total of 17 RHB and KGI trading accounts. She sought help from two other employees at these firms to carry out the trades. Her brother also handed over to her two more accounts he opened in his name.

Lau did not leave CGS-CIMB.

Overall, she contributed to 31 of the total 53 trading accounts used in the scheme.

Following legal action taken against her by CGS-CIMB, she paid some S$231,000 to the firm, on account of their losses made following the crash in Koyo share price in January 2016.

Lau is the fourth person in the scheme to be sentenced. Lin and three others have been charged, and their cases are ongoing.

Koyo shares closed down S$0.005 or 6.25 per cent at S$0.075 on Thursday.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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