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Enzo Financial Analytics Acquired By Hazeltree Treasury Solutions

October 5, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: Enzo Financial Analytics, Hazeltree Treasury Solutions, investment

US based treasury management and portfolio financial services provider Hazeltree recently revealed in an announcement that it has hired another US based financial services provider Enzo Financial Analytics-former subsidiary of CME Group – US marketplace giant which provider exchange, trading and clearance services. Enzo Financial Analytics in more popularly known in the market as leading provider of portfolio analytics for hedge funds and prime brokers. This acquisition deal fortified Hazeltree’s position as one of the market leaders in treasury and portfolio finance solutions. It should be noted that alongside investment from Hazeltree and its existing investors, this deal saw participation from London based global information provider IHS Markit in form of joint investment. Via this joint offering, the data giant is expected to use the services of US treasury and portfolio management solutions provider to evolve its own network of buy-side and sell-side clients.

Commenting on this deal, Pierre Khemdoudi, Global Co-Head of Equities Data & Analytics at IHS Markit stated, “The platforms and data solutions from Hazeltree and ENSO are highly complementary to our services and network of buy-side and sell-side clients. Our investment is a way to help align our solutions to serve the evolving needs of our customers while also establishing a foundation for potential further integration and partnerships in the future”.

While the press release spoke about acquisition of the firm and parties involved in the deal and what the firms gains from this deal, it lacked information of financial terms of transaction, to be specific – the statement contained no information on amount involved in acquisition of the firm from CME Group. This deal sees Enzo analytics purchased from CME Group in its entirety by Hazeltree and is set to be integrated with Hazeltree’s existing product portfolio. While the products themselves will remain actively available to clients and won’t see any major changes, Enzo’s prime brokerage, asset management, technology and data specialists will be integrated with Hazeltree’s team.

Commenting on the acquisition, Paul Busby, Global Head of ENSO commented, “This combination will create significant synergies for our global client base.Together, our teams will continue to deliver industry-leading technology to help drive continued innovation of our portfolio finance, treasury, and data solutions”. Speaking on same note, Sameer Shalaby, President and Chief Executive Office of Hazeltree commented, “We’re thrilled to join forces with the ENSO team as our combined talents in treasury, portfolio finance, data, and technology will offer unparalleled expertise and support to investment managers, empowering them with greater data insights, better transparency, improved workflows, and efficient execution to capture unrealized value.The acquisition will result in a truly unique integrated solution with extensive scale and talent, to support more than 200 important clients, who can now benefit from the best solutions and services available”.

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Niguel Brooks Appointed as Head of Infrastructure and Operations at HKEX

June 19, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: ASX, brokerage, Brokers, Capital Markets, DEC, HKEX, HKEX OTC Clear, investment, Niguel Brooks, Richard Leung, SGX

Hong Kong Exchange and Clearing announced earlier this week that it has hired Niguel Brooks as its new head of infrastructure and operations. The infrastructure and operations department is responsible for handling and managing all its application systems. In his new role as head of infra and ops, Brooks will be reporting to Richard Leung, Chief Technology Officer at HKEX.

Acting in the capacity of Leung’s deputy, Brooks will also be responsible for Hong Kong Exchange’s security and hosting services along with his duties as head of infra and ops. Nigel Brooks in an industry veteran with more than three decades of work experience, a major of part of which was spent serving key roles in two of world’s top stock exchanges.

Prior to joining Hong Kong Exchange, Brooks served as an advisor for Australian Securities Exchange –ASX, Sydney for a year and a half and served in Singapore stock exchange –SGX for a period of eight years. While in SGX, Brooks served in the capacity of Senior Vice President and was in charge of handling various departments such as Enterprise Architecture, Infrastructure, Technology Operations, Technology transformation and Board Committee of Inquiry. Brooks started his career in Digital Equipment Corporation which specialised in data center operations and providing network and software services where he served for 11 years. Post his tenure at DEC, Brooks spent the next 11 years serving as Senior Manager for Trading Applications Support and Development in Australian Securities Exchange.

Brooks joins HKEX just as Alfred Lai announced his resignation from the exchange group, having served the group for more than fourteen years. At the time of resignation, he served in the capacity of Managing Director for HKEX’s information technology division. When speaking about Alfred’s resignation, Leung commented, “On behalf of the company, I would like to thank Alfred for his considerable contributions and long service to HKEX. He has made significant contributions to the reliability of the IT operations at [our firm] during his tenure. We wish him a very happy retirement”. Leung also commented, “We are delighted to welcome Niguel to HKEX. His twenty years of international experience and his background in IT infrastructure and operations will be invaluable to us and I am very much looking forward to welcoming him to the team” on Brooks arrival at HKEX.

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Citigroup to Restructure Its FX Business Operations

June 19, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: banks, brokerage, Capital Markets, citigroup, financial services, FX hubs, FX Prime Brokerage, G10 group, investment, JP Morgan, UBS AG

US-based multinational investment banking and financial service provider Citigroup Inc recently made an announcement revealing its plans to merge two of its Forex related business operations into one single business operation. The banking giant announced that the decision to merge two units was agreed upon post its recent enterprise-wide review owing to a series of consumer scandals and as some of its business ventures failed to meet expected targets.

As per the announcement, the forex division, local markets, and G10 currency business units will be merged and will function as a single integrated department. The banking service provider hopes that this move of restructuring its business will make it easier for cross-selling of their products while bolstering the group’s risk management process at the same time.

As per data, Citigroup is the fifth largest currency trading firm in the global market as per market share coming after firms like JP Morgan and UBS. As per an internal memo of Citigroup published by Reuters recently, the co-heads of the market division were quoted commenting to their staff that, “We believe this more streamlined operating model will drive better client service, risk management, and profitability”. Despite the integration of various business units into a single department and similarities in the respective unit’s product offerings, the operating units will retain their current branding and offerings in the real world while sharing their technological resources. As part of this restructuring plan, the group’s banks will separate its G10 rates finance team from the newly merged forex business unit.

But, the G10 business operations from both banks and restructured forex unit will operate under the same unit leader which is a newly created post. The group is yet to make an announcement on who will head this unit. Two notable factors among various reasons for restructuring include the group’s FX prime brokerage unit losing nearly $180 million on loans to Asian hedge funds and the group’s institutional client business failing to meet annual targets in 2018. Citigroup has greatly enhanced its FX offerings this year post joining UBS AG to launch electronic currency trading and pricing platform in Singapore- one of Asia’s biggest FX hubs. The product offerings from this joint venture are expected to go live by the end of 2019 and is said to support 23 spot currencies, including all currencies from the G10 group.

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Kiwis Take Longer to Choose a Movie Than Check KiwiSaver

June 19, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: business, FMA, industry news, investment, investment returns, investor, KiwiSaver

Many New Zealanders spend longer choosing a movie to watch than reading and acting on their annual KiwiSaver statement.

A recent survey of 1100 New Zealanders for the Financial Markets Authority (FMA) found four out of five people took up to 10 minutes to choose a movie, but just over half of those questioned spent the same time reading their KiwiSaver annual statement.

More than 2.8 million New Zealanders are signed up to KiwiSaver and now is the right time for members to engage with their investments. That’s because all providers send an individual annual statement at this time of year.

The statement has all the information in one place that members need to check they are on track. It details how much is in their KiwiSaver, the investment returns achieved over the year, how much they paid in fees, as well as other key information.

“For many New Zealanders, KiwiSaver may be their first investment – we want to do all we can to help them make the most of it,” said Gillian Boyes, Investor Capability Manager at the FMA.

“A few more minutes checking your statement can make a huge difference to what you get in the end. For example, an 18-year old switching into a growth fund rather than staying in a conservative fund, could potentially end up with around $135,000 more in their fund by the time they turn 65.

“The FMA has simple online tools like the Health Checker to help you get the most from your KiwiSaver, if you don’t know where to start.”

The survey revealed that one in five people didn’t know how to check their KiwiSaver performance.

Men were more likely than women to state that their fund was performing better than expected, yet women were, in fact, more likely to check how their KiwiSaver had performed.

The survey is part of an FMA campaign to encourage people who may have their ‘heads in the sand’ about their KiwiSaver investment, to reflect on the fees and returns displayed in their statements and to improve their KiwiSaver settings by using the FMA health checker tool.

Securities Regulators Encourage Canadians to Help Identify and Stop Senior Financial Abuse

June 16, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: BCSC, capital, Capital Markets, Financial Abuse, investment, investor funds, public interest, Risk, Securities Market, securities regulators, trading

CALGARY – The Canadian Securities Administrators (CSA) is encouraging Canadians to be aware of the signs of financial abuse of seniors as part of World Elder Abuse Awareness Day (WEAAD) on June 15, 2019. Through a variety of online resources and activities across Canada, the CSA, its members and other senior-focused groups are highlighting the issue and the need to recognize, report and stop financial abuse of seniors.

“Awareness is the first step in recognizing and stopping financial abuse of seniors,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “With a growing senior population, it is more important than ever to help safeguard our aging communities who may become increasingly susceptible to financial exploitation and fraud.”

Canadians can help prevent financial abuse of seniors by:

Talking about financial matters with aging parents and friends.
Attending a local WEAAD event or seminar to highlight the issue with others.
Learning to recognize and avoid investment scams. Visit the CSA website to find important information and helpful resources about fraud prevention.
Taking time to investigate every investment opportunity or sales pitch as well as the person promoting the investment before handing over money. If unsure about an investment, consider seeking out independent, third-party advice.
Reporting investment fraud to their provincial or territorial securities regulator. Reporting potential scams may help prevent other seniors from becoming victims of investment fraud.

“Abuse of the elderly is a serious problem,” said Mr. Morisset. “Elderly people are particularly vulnerable to abuse and challenges like isolation, cognitive decline and fear can be major barriers to seeking and getting help. All Canadians have a role to play in raising awareness of financial abuse and preventing it whenever and wherever possible.”

Across Canada, the CSA and its members are working on various initiatives to help Canadians detect, prevent and respond to the financial abuse of seniors:

Louis Morisset

British Columbia: The B.C. Securities Commission (BCSC) believes it is important for everyone to know how to identify, prevent, avoid and report elder financial abuse. To raise awareness, the BCSC launched a new Elder Financial Abuse webpage on InvestRight.org that includes blog posts, an online newsletter issue and social media posts using the hashtag #RejectFinancialAbuse throughout June, highlighting WEAAD and Elder Financial Abuse.

Alberta: The goal of the Alberta Securities Commission’s (ASC) WEAAD campaign is to help seniors improve their financial literacy, empower them to make wise investment decisions and encourage all Albertans to be aware of the signs and symptoms of elder financial abuse. The ASC’s activities in June aim to connect directly with seniors and their caregivers through community events, a financial literacy quiz and seniors resources on Checkfirst.ca , including the Spot and Stop Seniors Investment Fraud fact sheet. The ASC also sponsored the THIRD ACTion Film Festival, which was focused on celebrating aging and the accomplishments of older adults to promote elder empowerment and an age-positive culture shift.

Saskatchewan: The Financial and Consumer Affairs Authority (FCAA) is helping Saskatchewan investors be proactive when working with registered financial representatives. Through social media and advertising, the FCAA is reminding investors to take an active role in their investing including: reviewing their trades and statements; understanding how their account is managed; and knowing to whom they should be writing their cheques.

Manitoba: The Manitoba Securities Commission (MSC) is working with Prevent Elder Abuse Manitoba (PEAM) to distribute literature and resources on elder abuse to seniors across the province, including Identifying and Preventing Financial Abuse, Protect Your Money: Avoiding Frauds and Scams, The ABCs of Senior Investment Fraud and Financial Concerns Checklist. MSC is also giving away free tote bags and information packages on senior fraud and financial abuse throughout the month.

Ontario: The Ontario Securities Commission (OSC) is working to promote a stronger and more secure financial future for all Ontario seniors. The OSC’s investor website, GetSmarterAboutMoney.ca , has free tools and resources for older Ontarians as well as information on how caregivers and family members can recognize, respond to and protect their loved ones from financial exploitation. As part of its OSC in the Community program, OSC staff are holding in-person seminars across the province and a telephone townhall on June 12, 2019, to educate people on fraud prevention, working with advisors, and making informed financial decisions. The OSC also continues implementing its Seniors Strategy, including the development of new tools and resources for the financial industry and older investors.

Québec: Seniors are a priority for the Autorité des marchés financiers (AMF ). The AMF is taking an active role in the Governmental Action plan to Counter Mistreatment of Older Adults 2017-2022. A practical guidefor the financial services industry, launched by the AMF, proposes possible courses of action to protect vulnerable clients. Its purpose is to provide the financial sector with guidance on the steps they can take to help protect clients’ financial well-being, prevent and detect financial abuse and assist clients. The AMF will continue its outreach efforts to seniors throughout the year with fraud prevention conferences, including social media posts on WEAAD to raise awareness about elder abuse.

New Brunswick: The Financial and Consumer Services Commission (FCNB) will launch a campaign on June 15 to raise awareness about senior financial abuse. FCNB’s campaign will use social media, videos, posters, presentations and advertisements to encourage New Brunswickers to have conversations about money and estate planning with their friends and family as a way to protect themselves and the seniors in their lives against financial abuse and fraud. It will also promote tools and brochures found on its website, including Recognizing Financial Abuse, The Record Keeper and Early Signs of Financial Decline.

Nova Scotia: The Nova Scotia Securities Commission (NSSC) launched a new page on their website focused on Investing Information for Seniors, that includes new information sheets called Protecting Seniors from Investment Fraud and Financial Elder Abuse: Know the Signs, Know What to Do, and a new online guide called Safe Investing for Seniors: Recognizing fraud and financial elder abuse. The website also has content for seniors on investing for retirement, investment fees, registration and investment risk. Throughout June, the NSSC revealed a new animated video series highlighting financial elder abuse, which can be found on the NSSC’s website or on its YouTube channel (Nova Scotia Informed Investor).

WEAAD was launched by the International Network for the Prevention of Elder Abuse in 2006 and is recognized by thousands of international organizations and communities around the world. Canadian WEAAD activities, resources and tools can be found on the Canadian Network for the Prevention of Elder Abuse . In addition, t he CSA has a number of investor tools and resources available at on its website designed to help Canadians be informed investors. Investors can stay informed of the latest investor tips, news and developments by following @CSA_News on Twitter and @CSA.ACVM on Facebook.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

B.C. Residents and Nevada-based Company Breached Cease Trade Order and Made Misrepresentations

June 10, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: BCSC, business, Capital Markets, Financial Officer, government agency, industry, industry news, investment, investment opportunities, investors, SEC, securities industry, trade

Vancouver – A British Columbia Securities Commission (BCSC) panel has found that three B.C. residents and a Nevada-based green energy company breached a cease trade order of the BCSC and failed to tell investors about the existence of the order.

ecoTECH (now known as Dong Fang Hui Le Inc.) and three of its top executives, Chief Executive Officer Colin V. Hall, Chief Financial Officer Rolf Eugster and Director Anne Sanders, sold $55,100 worth of securities in 2013 to 16 investors despite a cease trade order issued by the BCSC in 2012. In addition, they failed to tell investors about the order.

Hall, Sanders and ecoTECH – a reporting issuer in B.C. – also distributed $3.3 million worth of securities to 15 people as compensation for services rendered in breach of the order.

By neglecting to inform investors that the shares issued for cash were being issued in violation of a cease trade order, Hall, Eugster, Sanders and ecoTECH committed misrepresentation. The panel stated that “one of the acceptable risks associated with an investment (no matter how risky) cannot be the risk of misrepresentation.”

The panel will impose sanctions after considering submissions from BCSC staff and the respondents.

About the British Columbia Securities Commission (www.bcsc.bc.ca)

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:

A securities market that is fair and warrants public confidence
A dynamic and competitive securities industry that provides investment opportunities and access to capital

SEC Charges Kik Interactive Inc. With Conducting $100 Million Unregistered ICO

June 10, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: business, industry, industry news, investment, investors, management, news, SEC, securities laws, transaction service

Washington D.C., June 4, 2019 — The Securities and Exchange Commission today sued Kik Interactive Inc. for conducting an illegal $100 million securities offering of digital tokens. The SEC charges that Kik sold the tokens to U.S. investors without registering their offer and sale as required by the U.S. securities laws.

As alleged in the SEC’s complaint, Kik had lost money for years on its sole product, an online messaging application, and the company’s management predicted internally that it would run out of money in 2017. In early 2017, the company sought to pivot to a new type of business, which it financed through the sale of one trillion digital tokens. Kik sold its “Kin” tokens to the public, and at a discounted price to wealthy purchasers, raising more than $55 million from U.S. investors. The complaint alleges that Kin tokens traded recently at about half of the value that public investors paid in the offering.

The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik offered and sold the tokens, the SEC alleges these services and systems did not exist and there was nothing to purchase using Kin. Kik also allegedly claimed that it would keep three trillion Kin tokens, Kin tokens would immediately trade on secondary markets, and Kik would profit alongside investors from the increased demand that it would foster. The Kin offering involved securities transactions, and Kik was required to comply with the registration requirements of the U.S. securities laws.

Steven Peikin, Co-Director of the SEC’s Division of Enforcement

“By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions,” said Steven Peikin, Co-Director of the SEC’s Division of Enforcement. “Companies do not face a binary choice between innovation and compliance with the federal securities laws.”

“Kik told investors they could expect profits from its effort to create a digital ecosystem,” said Robert A. Cohen, Chief of the Enforcement Division’s Cyber Unit. “Future profits based on the efforts of others is a hallmark of a securities offering that must comply with the federal securities laws.”

The SEC’s complaint charges Kik Interactive Inc. with violating the registration requirements of Section 5 of the Securities Act of 1933. The SEC seeks a permanent injunction, disgorgement plus interest, and a penalty. The Commission has previously charged issuers in settled cases alleging violations of these requirements, including Munchee Inc., Gladius Network LLC, Paragon Coin Inc. and CarrierEQ Inc. d/b/a Airfox.

The SEC’s investigation was conducted by Brent Mitchell, Jeff Leasure, and James Murtha of the SEC’s Complex Financial Instruments Unit and supervised by Mr. Cohen and Reid Muoio, Deputy Chief of the unit. The litigation will be handled by David Mendel and Stephan Schlegelmilch. The SEC appreciates the assistance of the Ontario Securities Commission.

Hedge Fund Manager to Pay $5 Million for Compliance Failures Related to Valuation of Fund Assets

June 8, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: business, financial instruments, Fund Assets, funds, hedge fund, industry news, investment, investor, SEC, SEC Enforcement

Washington D.C., June 4, 2019 — The Securities and Exchange Commission today announced that a private fund manager in the mortgage-backed securities space has agreed to pay a $5 million penalty to settle charges stemming from compliance deficiencies that contributed to the firm’s failure to ensure that certain securities in its flagship fund were valued properly.

The fund manager’s chief investment officer (CIO) agreed to pay a $250,000 penalty.

An SEC investigation found that Colorado-based investment adviser Deer Park Road Management Company LP, in connection with its flagship STS Partners’ fund which has been ranked as one of the most consistent performing hedge funds in the country, failed to have policies and procedures to address the risk that its traders were undervaluing securities and selling for a profit when needed. The firm also failed to guard against its traders’ providing inaccurate information to a pricing vendor and then using the prices it got back to value bonds. CIO Scott Burg oversaw the valuation of certain assets in the flagship fund and approved valuations that the traders flagged as “undervalued” with notations to “mark up gradually.” Also overseeing valuation was a committee comprised of the principal’s relatives and others without relevant expertise.

“Valuation of client assets is a critically important area for investment advisers,” said Daniel Michael, Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit. “Deer Park’s pervasive compliance failures allowed its traders to mark assets up gradually instead of marking them to market, in violation of the accounting principles they were required to follow.”

Without admitting or denying the findings in the SEC’s order, Deer Park consented to a censure and Deer Park and Burg agreed to cease and desist from committing or causing any violations and future violations of a provision of the Investment Advisers Act requiring reasonably designed policies and procedures.

The SEC’s investigation was conducted by William Finkel and Gregory Smolar of the Complex Financial Instruments Unit and Douglas Smith of the New York office with assistance from Ling Yu of the Office of Compliance Inspections and Examinations as well as Dugan Bliss and Christopher Dunnigan. Osman Nawaz and Mr. Michael supervised the case.

SEC Announces Enforcement and Investor Education Initiatives to Protect Teachers and Military Service Members

June 8, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: Enforcement, Enforcement Division, financial regulation, fraud, investment, Investor Education Initiatives, Military Service Members, SEC

Washington D.C., June 3, 2019 — The Securities and Exchange Commission today announced two new education initiatives that will build on its ongoing efforts to protect retail investors. The Teachers’ Initiative and the Military Service Members’ Initiative will build on the Commission’s past efforts and focus additional enforcement and investor education resources on behalf of teachers, veterans, and active duty military personnel stationed domestically and abroad.

“Teachers, active duty military, and veterans provide tremendous service to our country,

Jay Clayton, SEC Chairman

often at great personal and financial sacrifice to themselves and their families, yet far too often are targeted and fall victim to securities fraud and other misconduct,” said Chairman Jay Clayton. “These new initiatives reflect the Commission’s dedication to fighting fraud and to educating retail investors. My colleagues and I are particularly focused on ensuring that our teachers, veterans, and active duty military, who often leave financial planning to others, know the financial services they are getting, what they are paying for those financial services, and to call us if something doesn’t seem right.”

The initiatives build upon Chairman Clayton’s commitment to protecting the most vulnerable market participants and the SEC Enforcement Division’s long and successful history in pursuing securities fraudsters who target teachers, active military, and veterans. We look forward to continuing to partner with state securities regulators, as well as other state and federal law authorities, on these important initiatives.

The initiatives will increase proactive outreach to these groups to educate them about savings and investment, investment fees and expenses, retirement programs specific to educators and service members, and the red flags of investment fraud. The initiatives will be led by the Enforcement Division’s Retail Strategy Task Force in partnership with the Commission’s Office of Investor Education and Advocacy. These efforts will build upon the Commission’s existing Teacher Investment Outreach program, led by the SEC’s San Francisco Regional Office, and the Commission’s longstanding commitment to serving active military and veterans through investor advocacy and outreach (www.sec.gov/spotlight/military.shtml, www.sec.gov/page/spotlight-military-investment-options and www.investor.gov/military).

“The Enforcement Division is committed to fighting for our country’s educators, service members, and veterans, who may be vulnerable to fraud in the securities markets,” said Steven Peikin, Co-Director of the SEC’s Enforcement Division.

Stephanie Avakian Stephanie Avakian – Co-Director of the SEC’s Enforcement Division

“Teachers and members of the military community have already made tremendous financial sacrifices for our country and can quickly face financial ruin as the result of securities fraud,” added Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.

“Education is the cornerstone of investor protection, and we have no more important constituents than our teachers and members of the military,” said Lori J. Schock, Director of the SEC’s Office of Investor Education and Advocacy. “We look forward to working together to help these important groups make the best investment decisions right for them – and protect themselves from fraud.”

“State securities regulators have long recognized the importance of protecting those who serve our communities and our nation from financial exploitation. These public servants dedicate their professional lives to helping others and they deserve to know that their state and federal governments are working together to provide them the tools and resources necessary to protect their financial future,” said Michael S. Pieciak, President of the North American Securities Administrators Association and Commissioner of the Vermont Department of Financial Regulation.

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MAS Imposes Civil Penalty of $336,000 on Mr Tham Wai Mun Raphael for Insider Trading

June 6, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: ACE, capital, Civil Penalty, FCA, Foxtrox, investment, London Stock Exchange, MAS, SFA, Singapore, trading

Singapore, 4 June 2019… The Monetary Authority of Singapore (MAS) has imposed a civil penalty of $336,000 on Mr Tham Wai Mun Raphael for insider trading. He had sold shares in Auhua Clean Energy PLC (ACE), a company listed on the Alternative Investment Market of the London Stock Exchange, while in possession of non-public and price-sensitive information concerning the company.

Mr Tham, who was the Non-Executive Vice Chairman of ACE, has admitted to contravening the insider trading prohibition under section 218(2)(b) of the Securities and Futures Act, and has paid MAS a civil penalty of $336,000 without court action. The penalty represented 2.5 times the losses that Mr Tham had avoided from the sale of his shares. Mr Tham has also given MAS a voluntary undertaking not to be a company director or be involved in the management of a company for a period of two years with effect from 5 June 2019.

The case was referred to MAS by the Financial Conduct Authority (FCA) of the United Kingdom, which provided assistance in the investigation.

Ms Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime), MAS, said, “The civil penalty action against Mr Tham, a Singaporean who engaged in insider dealing of shares listed in the United Kingdom, reflects our commitment to pursue offenders who commit market misconduct, regardless of whether the securities are listed in Singapore or overseas. The successful action is a result of the close cooperation and information sharing arrangements MAS has with foreign regulators like the FCA, to help fight financial crimes that transcend borders.”

Background of the case

On 16 June 2015, ACE announced that it was considering a share placement at a substantial price discount to raise approximately £1.5 million. Following the announcement, the price of ACE shares fell by 45% to close at 7.75 pence.

On 19 June 2015, ACE furnished more information on the share placement by announcing that it had placed out 38 million shares, representing 30% of the enlarged share capital to raise £1,724,500 at 4.5 pence per share. The placement price represented a 44% discount from the previous day’s closing price. The price of ACE shares fell by another 30% to close at 5.625 pence after the second announcement.

At the time, Mr Tham, who was based in Singapore, was the Non-Executive Vice Chairman of ACE. On 12 June 2015, he used Foxtrox Holdings Limited (Foxtrox), an investment holding company, to sell 569,745 ACE shares while he was in possession of the non-public and price-sensitive information concerning the share placement. Mr Tham held authority over Foxtrox’s trading account when the trades took place. The share sale allowed Foxtrox and Mr Tham to avoid a loss of £76,203, or $134,186, when compared to ACE’s closing price of 5.625 pence on 19 June 2015.

***

Additional information

(A) The civil penalty regime

A civil penalty action is not a criminal action and does not attract criminal sanctions. The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004.
Under section 232 of the SFA, MAS may enter into an agreement with any person for that person to pay, with or without admission of liability, a civil penalty for contravening any provision of Part XII of the SFA. The civil penalty may be up to three times the amount of the profit gained or loss avoided by that person as a result of the contravention, subject to a minimum of $50,000 (if the person is not a corporation) or $100,000 (if the person is a corporation).

(B) Insider Trading under Section 218(2)(b) of the SFA

Section 218(2)(b) of the SFA prohibits a person who is in possession of materially price-sensitive information concerning a corporation (to which the person is connected), which the person knows is materially price-sensitive and not generally available, from (whether as principal or agent) procuring another person to subscribe for, purchase, sell, or enter into an agreement to subscribe for, purchase or sell those securities of that corporation.

(C) Connected Person

Section 218(5) of the SFA provides that a person is connected to a corporation if, amongst others, he occupies a position that may reasonably be expected to give him access to information of a kind to which Section 218 applies by virtue of any professional or business relationship existing between himself (or his employer or a corporation of which he is an officer) and that corporation or a related corporation.

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