Singapore MAS Enforcement Report 2023: 39 Criminal Convictions, 23 Jailed, 26 Fined, 13 False Trading, 6 Insider Trading, 7 Fraud, S$12.9 Million Civil Penalties, S$7.8 Million Fines, 16 Representatives Banned, Average 4 Years to Conclude Civil Penalties & 2 Years for Criminal Prosecutions, Noble Group Fined S$12.6 Million for Misleading Statement, S$3.8 million Fine in Wirecard Case on Citibank, DBS, OCBC & Swiss Life
22nd September 2023 | Hong Kong
Singapore central bank Monetary Authority of Singapore (MAS) has released the MAS Enforcement Report 2023, providing key insights into Singapore central bank regulatory enforcement (criminal conviction, fines, bans, regulatory breaches, insider trading, false trading, money-laundering failures etc) from 2022 to 2023 June (18 months). For the review period, MAS took 455 actions (Reprimands 7, Warnings 112, Letters of advice 49, Supervisory reminders 287), with civil penalties totalling S$12.96 million (2 false trading, 1 insider trading, 1 disclosure breaches) and financial penalties totalling S$7.88 million (13 banks, 4 insurers, 1 capital market services licensee, 1 individual). For Prohibition orders to representatives (ban) 16 were issued, Total Criminal Convictions 39, Sentenced to Jail 23, Fine 26, False Trading 13, Insider Trading 6, Fraud 7. The Top 5 Reviews & Investigations are Insider trading, Disclosure-related breaches, False trading, Carrying on regulated activities without licence, Referral by other agencies for assessment of fitness & propriety. The average time for Concluded Cases is 11 months (around 1 year), for Criminal Prosecutions is 26 months (> 2 years), and for Civil Penalties is 47 months (around 4 years). Key featured cases include Noble Group misleading financial statement and fined S$12.6 million, S$3.8 million fine in Wirecard case on Citibank, DBS, OCBC, Swiss Life for breaching requirements for Anti-Money Laundering & Countering the Financing of Terrorism, and 10-year ban for DBS Wealth Planning Manager Loh Thim Mun for cheating 7 clients to transfer S$490,000 to personal account and sentenced to 33 months jail. See below for key findings & summary | View report here
“ 39 Criminal Convictions, 23 Jailed, 26 Fined, 13 False Trading, 6 Insider Trading, 7 Fraud, S$12.9 Million Civil Penalties, S$7.8 Million Fines, 16 Representatives Banned, Average 4 Years to Conclude Civil Penalties & 2 Years for Criminal Prosecutions, Noble Group Fined S$12.6 Million for Misleading Statement, S$3.8 million Fine in Wirecard Case on Citibank, DBS, OCBC & Swiss Life “
Monetary Authority of Singapore (MAS) Executive Director Enforcement Department, Peggy Pao-Keerthi Pei Yu: “MAS has taken strong enforcement actions and deepened relationships with our partners to uphold the integrity and reputation of Singapore as a trusted financial centre. Even as the novelty and complexity of our cases increase, we will continue to administer an effective and fair enforcement regime in order to deter misconduct, protect consumers and maintain investor confidence.”
Opening Message Peggy Pao-Keerthi Pei Yu – ” Moving forward, our cases will only increase in novelty and complexity. The volume of digital evidence involved in our cases has increased exponentially. To address this, we have employed e-Discovery in our investigations and will continue to leverage technology to improve our effectiveness and efficiency.MAS has also introduced new regulatory requirements to address the risks posed by errant crypto-asset service providers. Such players typically operate across borders, presenting challenges to traditional law enforcement.”
Singapore MAS Enforcement Report 2023
Singapore central bank Monetary Authority of Singapore (MAS) has released the MAS Enforcement Report 2023, providing key insights into Singapore central bank regulatory enforcement (criminal conviction, fines, bans, regulatory breaches, insider trading, false trading, money-laundering failures etc) from 2022 to 2023 June (18 months).
Summary
- Singapore MAS Enforcement Goals – Early detection of misconduct & breaches of law, Effective deterrence, Shaping business & market conduct
- MAS Enforcement Overview – Intervening in Potential Market Abuse, Detecting Disclosure-Related Breaches, Financial Services Misconduct, Money Laundering-Related Control Breaches
- MAS Review Period – 2022 to 2023 June (18 months)
- MAS Enforcement Next Priorities – Enforcement in the Digital Asset Ecosystem, Focus on Asset and Wealth Managers
- MAS Actions Taken – 455 (Reprimands 7, Warnings 112, Letters of advice 49, Supervisory reminders 287)
- Civil penalties – S$12.96 million (2 false trading, 1 insider trading, 1 disclosure breaches)
- Financial penalties – S$7.88 million (13 banks, 4 insurers, 1 capital market services licensee, 1 individual)
- Prohibition orders to representatives (ban) – 16
- Total Criminal Convictions – 39
- Sentenced to Jail – 23 (13 jail only)
- Jail & Fine – 10
- Fine – 26 (16 fine only)
- False Trading – 13
- Insider Trading – 6
- Fraud – 7
- Disclosure breaches – 3
- Conduct unlicensed activities – 9
- Top 5 Reviews & Investigations – Insider trading 32, Disclosure-related breaches 25, False trading 22, Carrying on regulated activities without licence 20, Referral by other agencies for assessment of fitness & propriety 14
- Average time for Concluded Cases – 11 months (around 1 year)
- Average time for Criminal Prosecutions – 26 months (> 2 years)
- Average time for Civil Penalties – 47 months (around 4 years)
Summary – Featured Cases
- Case 1 (Market Abuse) – Noble Group misleading financial statement & fined S$12.6 million
- Case 2 (Market Abuse) – 5 Remisiers rigged share prices to generate profit of S$1.2 million. Jailed 12 to 24 weeks and fined S$190,000 to S$260,000 each
- Case 3 (Financial Services Misconduct) – Failed to discharge duties and comply with regulatory requirements. 9-year ban for 2 Directors of Three Arrows Capital (Zhu Su & Kyle Livingston Davies)
- Case 4 (Financial Services Misconduct) – UOB Kay Hian fined S$375,000 for Compliance & AML failures, including IPO Due Diligence, Corporate Financing Audits, Red Flags on Nominee Arrangement, Client Source of Wealth (SOW)
- Case 5 (Financial Services Misconduct) – 10-year ban for DBS Wealth Planning Manager Loh Thim Mun for cheating 7 clients to transfer S$490,000 to personal account. Sentenced to 33 months jail.
- Case 6 (Money Laundering-Related Control Breaches) – S$3.8 million fine in Wirecard case on Citibank, DBS, OCBC, Swiss Life for breaching requirements for Anti-Money Laundering & Countering the Financing of Terrorism
- Case 7 (Money Laundering-Related Control Breaches) – 10-Year ban in 1MDB case for former BSI Bank Deputy CEO & Head of Private Banking Raj Sriram. Fined S$150,000
- Case 8 (Money Laundering-Related Control Breaches) – Lifetime ban in 1MDB case for former Goldman Sachs Ng Chong Hwa (Roger Ng). Sentenced to 10 years jail in United States
Summary – Ongoing Cases
- Case 1 – Hui Xun Asset Management (Envysion Wealth Management) for governance or risk management failures in conduct of business (invested into alleged fraud to finance of trading activities in nickel)
- Case 2 – Eagle Hospitality Trust for possible breaches of relevant laws and regulations, and exchange listing rules
Singapore MAS Enforcement Report 2023
Enforcement Goals:
- Early detection of misconduct & breaches of law
- Effective deterrence
- Shaping business & market conduct
1) MAS Enforcement Actions from 2022 to 2023 June (18 months)
MAS Actions Taken:
- Total Actions taken – 455
- Reprimands – 7
- Warnings – 112
- Letters of advice – 49
- Supervisory reminders – 287
MAS Penalties & Bans (Prohibition Orders):
- Civil penalties – S$12.96 million (2 false trading, 1 insider trading, 1 disclosure breaches)
- Financial penalties – S$7.88 million (13 banks, 4 insurers, 1 capital market services licensee, 1 individual)
- Prohibition orders to representatives – 16
MAS Criminal Convictions :
- Total Criminal Convictions – 39
- Sentenced to Jail – 23 (13 jail only)
- Jail & Fine – 10
- Fine – 26 (16 fine only)
MAS Conviction Type:
- False Trading – 13
- Insider Trading – 6
- Fraud – 7
- Disclosure breaches – 3
- Conduct unlicensed activities – 9
Top Reviews & Investigations:
- Insider trading – 32
- Disclosure-related breaches – 25
- False trading – 22
- Carrying on regulated activities without licence – 20
- Referral by other agencies for assessment of fitness & propriety – 14
- Money laundering-related control breaches – 7
- Deception / Fraud under the Securities & Futures Act – 6
- Breach of requirements for offer documents – 3
- Mis-selling of financial products – 1
- Breach of business conduct rules – 1
- Others – 5
Time taken for Reviews & Investigations (2022 to 2023 June):
- Criminal Prosecutions – 26 months (> 2 years)
- Civil Penalties – 47 months (around 4 years)
- Other Actions – 13 months (around 1 year)
- Referrals to External Agencies – 2 months
- Average Across All Concluded Cases – 11 months (around 1 year)
2) Featured Cases
- Case 1 (Market Abuse) – Noble Group misleading financial statement & fined S$12.6 million
- Case 2 (Market Abuse) – 5 Remisiers rigged share prices to generate profit of S$1.2 million. Jailed 12 to 24 weeks and fined S$190,000 to S$260,000 each
- Case 3 (Financial Services Misconduct) – Failed to discharge duties and comply with regulatory requirements. 9-year ban for 2 Directors of Three Arrows Capital (Zhu Su & Kyle Livingston Davies)
- Case 4 (Financial Services Misconduct) – UOB Kay Hian fined S$375,000 for compliance & AML failures, including IPO Due Diligence, Corporate Financing Audits, Red Flags on Nominee Arrangement, Client Source of Wealth (SOW)
- Case 5 (Financial Services Misconduct) – 10-year ban for DBS Wealth Planning Manager Loh Thim Mun for cheating 7 clients to transfer S$490,000 to personal account. Sentenced to 33 months jail.
- Case 6 (Money Laundering-Related Control Breaches) – S$3.8 million fine in Wirecard case on Citibank, DBS, OCBC, Swiss Life for breaching requirements for Anti-Money Laundering & Countering the Financing of Terrorism
- Case 7 (Money Laundering-Related Control Breaches) – 10-Year ban in 1MDB case for former BSI Bank Deputy CEO & Head of Private Banking Raj Sriram. Fined S$150,000
- Case 8 (Money Laundering-Related Control Breaches) – Lifetime ban in 1MDB case for former Goldman Sachs Ng Chong Hwa (Roger Ng). Sentenced to 10 years jail in United States
3) Ongoing Major Cases
- Case 1 – Hui Xun Asset Management (Envysion Wealth Management) for governance or risk management failures in conduct of business (invested into alleged fraud to finance of trading activities in nickel)
- Case 2 – Eagle Hospitality Trust for possible breaches of relevant laws and regulations, and exchange listing rules
4) Case Details
Case 1 (Market Abuse) – Noble Group misleading financial statement & fined S$12.6 million
- S$12.6 million civil penalty to Noble Group for publishing misleading information of financial statement from 2016 to 2018
- ACRA (Accounting & Corporate Regulatory Authority) issued stern warnings to 2 former directors of subsidiary Noble Resources International for failure to prepare and table annual financial statements in compliance with accounting standard
- Noble Group & Noble Resources International inflated profits & net assets by incorrectly classifying marketing agreements (service contract) as financial instruments and recognised future fees before rendering services.
- Misleading financial statements from 2016 to 2018 induced investors to buy Noble Group shares
Case 2 (Market Abuse) – 5 Remisiers rigged share prices to generate profit of S$1.2 million. Jailed 12 to 24 weeks and fined S$190,000 to S$260,000 each
- 5 ex-Remisiers rigged 55 share prices between 2015 to 2016 to generate profit of S$1.2 million.
- Jailed 12 to 24 weeks and fined S$190,000 to S$260,000 each
- Coordinated trading activities to create false impression of active trading and interest in the securities they owned to induce other investors to trade & drive up the share prices.
- Identified suitable penny stocks & buy or sell in large quantities (progressively at higher price)
- Once share prices had risen sufficiently (target profit), the Remisiers will sell the remaining shares.
- 5 ex-Remisiers are Alan Lee, Mr Chew Wei Zhan, Mr Lee Wei Kai, Mr Lim Ming Yi, Mr Lim Ming Chit
Case 3 (Financial Services Misconduct) – Failed to discharge duties and comply with regulatory requirements. 9-year ban (Prohibition Order) for 2 Directors of Three Arrows Capital (Zhu Su & Kyle Livingston Davies)
- 9-year ban (Prohibition Order, 13/9/23) for 2 Directors of Three Arrows Capital (Zhu Su & Kyle Livingston Davies)
- Failed to discharge duties and comply with regulatory requirements.
- Failed to notify Singapore MAS hiring of representative Cheong Jun Yoong Arthur to perform fund management activities
- Falsely represented Cheong Jun Yoong Arthur did not perform fund management activities, and thus did not need to notify Singapore MAS
- Reprimanded in 2022 for providing false information to Singapore MAS (failure to provide change in shareholdings & directorship, exceeded AUM threshold for registered fund management company)
- Did not have management framework to identify, monitor, and address risks associated with the cryptocurrency and digital asset investments under its management.
Case 4 (Financial Services Misconduct) – UOB Kay Hian fined S$375,000 for compliance & AML failures, including IPO Due Diligence, Corporate Financing Audits, Red Flags on Nominee Arrangement, Client Source of Wealth (SOW)
- UOB Kay Hian Fined S$375,000 for Compliance & AML Failures
- No requirement for its compliance officers to attend its internal business & risk management meetings
- Failed to ensure internal policies & procedures on conducting due diligence for IPOs met the standards set out in the applicable Association of Banks in Singapore Listings Due Diligence Guidelines
- Failed to ensure corporate financing activities have adequate internal audit
- Verify customers’ source of wealth during onboarding, even after classifying them as higher money laundering risk
- Failed to detect & report suspicious transactions despite red flags regarding potential nominee arrangements
Case 5 (Financial Services Misconduct) – 10-year ban for DBS Wealth Planning Manager Loh Thim Mun for cheating 7 clients to transfer S$490,000 to personal account. Sentenced to 33 months jail.
- 10-year Ban (Prohibition Order) for DBS Wealth Planning Manager Loh Thim Mun
- Sentenced to 33 months
- Deceived 7 clients to transfer S$490,000 to personal account (2018)
- Falsely informed some of his clients that their monies were placed in fixed deposits accounts.
- Deceived 1 client of DBS share ownership scheme through him and forged letter confirming the placement of the client’s monies in the scheme.
- Used part of the monies to purchase virtual credits on an unlawful gambling site.
Case 6 (Money Laundering-Related Control Breaches) – S$3.8 million fine in Wirecard case on Citibank, DBS, OCBC, Swiss Life for breaching requirements for Anti-Money Laundering & Countering the Financing of Terrorism
- S$3.8 million fine in Wirecard case on 3 banks & 1 insurer for breaching requirements for Anti-Money Laundering & Countering the Financing of Terrorism (AML / CFT)
- Citibank fined S$400,000
- DBS Bank fined S$2.6 million
- OCBC fined S$600,000
- Swiss Life fined S$200,000
- Failed to understand the customers’ ownership & control structure
- Failed to inquire background & purpose of transactions that were not consistent with the FIs’ knowledge of the customers and their business, or were unusually large and exhibited an unusual pattern that had no apparent economic purpose
- Failed to establish, by appropriate and reasonable means, the source of wealth of customers and their beneficial owners, who the FIs have determined to present higher money laundering/terrorism financing (ML/TF) risks.
- Failed to maintain relevant and up-to-date customer due diligence (CDD) information relating to customers’ beneficial ownership
- Failed to update customers’ ML/TF risk ratings, which resulted in the failure to perform timely enhanced CDD measures on the customers
Case 7 (Money Laundering-Related Control Breaches) – 10-Year ban in 1MDB case for former BSI Bank Deputy CEO & Head of Private Banking Raj Sriram. Fined S$150,000
- 10-Year ban (Prohibition Order) in 1MDB case for former BSI Bank Deputy CEO & Head of Private Banking Raj Sriram
- Fined S$150,000 & committed to refrain from criminal conduct for 2 years
- Failed to file suspicious transaction reports (STRs) in respect of 1MDB-related transactions under the MAS Act.
- The Prohibition Order under the FAA took effect from 10 October 2022.
Case 8 (Money Laundering-Related Control Breaches) – Lifetime ban in 1MDB case for former Goldman Sachs Ng Chong Hwa (Roger Ng). Sentenced to 10 years jail in United States
- Lifetime ban (Prohibition Order) in 1MDB case for former Goldman Sachs Ng Chong Hwa (Roger Ng).
- Sentenced to 10 years jail in United States for conspiracy to launder monies and violation of the US’ Foreign Corrupt Practices Act
- Conspired with Tim Leissner and others, to launder billions of dollars misappropriated from 1MDB, through three bond offering transactions underwritten by The Goldman Sachs Group, Inc and its subsidiaries and affiliates.
- The Prohibition Orders under the FAA and SFA took effect from 5 September 2023.
Major Ongoing Case 1 – Eagle Hospitality Trust for possible breaches of relevant laws and regulations, and exchange listing rules
- Possible breaches of relevant laws and regulations, and exchange listing rules
- 5th June 2020 – MAS and CAD launched joint investigation into Eagle Hospitality Trust (EHT) for possible offences under the SFA.
- Referred by Singapore Exchange Regulation (SGX RegCo)
- MAS is in the process of reviewing the large amount of documents seized and information obtained in the course of investigation.
- MAS has also sought advice from industry experts on the case.
Major Ongoing Case 2 – Hui Xun Asset Management (Envysion Wealth Management) for governance or risk management failures in conduct of business (invested into alleged fraud to finance of trading activities in nickel)
- Fund management firm had invested customers’ monies into an alleged fraudulent scheme relating to financing of trading activities in nickel.
- MAS is looking into Envysion Wealth Management (now known as Hui Xun Asset Management) for governance or risk management failures in conduct of business.
- MAS has completed reviewing the documents obtained from HXAM and its interviews with persons acquainted with the case.
- MAS is currently working with AGC to review the findings.
5) MAS Enforcement Overview
A) Intervening in Potential Market Abuse:
- Executing Timely Disruptions – trading restrictions, off-boarding of customers, letters of advice to caution against potential unlawful behaviour
- Enhancing Brokers’ Capabilities – closed-door engagements with top management of broking firms to enhance market monitoring & surveillance capabilities
- Building Intelligence Sources – Suspicious Transaction Report (STR) filings, information from members of public
B) Detecting Disclosure-Related Breaches:
- Strengthening Gate-keeping – In 2023, MAS issued Notice on Business Conduct Requirements for Corporate Finance Advisers to set out due diligence requirements.
- Deepening Collaboration with Stakeholders – Improved case referral protocols with key stakeholders (eg. SGX RegCo and ACRA), so that all investigative angles in disclosure and accounting-related case are covered
C) Financial Services Misconduct:
- Main Misconducts – Tackle mis-selling of financial products, breaches of business conduct rules and serious unfitness and impropriety
- Focus on Asset & Wealth Mangers – Take action against errant players who breached applicable laws & regulations, including business conduct & AML/CFT requirements
- Expansion of Prohibition Order Powers – Financial Services and Markets Act (FSMA) (Phase 1 28/4/23, Remaining passes 2023 2H & 2024)
D) Money Laundering-Related Control Breaches
- Anti-Money Laundering & Countering the Financing of Terrorism (AML/CFT) – Financial institutions (FIs) to have robust controls to detect and disrupt attempts to abuse Singapore’s financial system for illicit purposes.
- Robust Supervision & Enforcement – Risk-focused supervisory approach is supported by surveillance and data-driven insights. Enforcement actions where appropriate.
- Enhanced Focus on Accountability – Board of directors & senior managers to exercise strong oversight over ML/TF risks, as well as ensure the effective implementation of key AML/CFT controls. Take firm action against senior managers who do not properly discharge their duties
6) MAS Enforcement Outreach & Plans Ahead
International Cooperation
- Monetary Authority of Singapore (MAS) is Member of IOSCO Committee 4 on Enforcement and the Exchange of Information, and a signatory to both the IOSCO’s Multilateral Memorandum of Understanding (MMoU) and Enhanced MMoU (EMMoU)
- MAS can obtain assistance from and render assistance to fellow signatory regulators for the purpose of enforcing and securing compliance with securities and derivatives laws in the requesting regulator’s jurisdiction.
- Received and supported 71 IOSCO requests from 25 international regulators
- Sent 5 IOSCO requests to 4 international regulators
New Technology
- Technology-Assisted Review (TAR) for data visualisation and analytics
- e-Discovery platform with added features for the end-to-end handling of electronic documents obtained during the course of investigation.
- e-Discovery platform will allow data to be collected, processed, reviewed, analysed and produced in common standards, while preserving data integrity.
- Key features – Collaborative Working Environment, Privacy Protection, Data Visualisation and Analytics
Looking Ahead – Singapore MAS Enforcement
- Enforcement in the Digital Asset Ecosystem
- Focus on Asset and Wealth Managers
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