Public Prosecutor v Fan Ying Kit & another
| Jurisdiction | Singapore |
| Judge | Jill Tan Li Ching |
| Judgment Date | 21 April 2011 |
| Neutral Citation | [2011] SGDC 126 |
| Court | District Court (Singapore) |
| Docket Number | DAC 32734 of 2010 & others |
| Year | 2011 |
| Published date | 26 April 2011 |
| Hearing Date | 06 April 2011,11 March 2011,28 March 2011 |
| Plaintiff Counsel | Sarah Lam and David Chew (Deputy Public Prosecutors) |
| Defendant Counsel | Kevin Lim (M/s Wee Swee Teow & Co) |
| Citation | [2011] SGDC 126 |
This case featured the first persons to have been charged for the trading of shares in a manner known as “front running”, and thus raised the issue of how such offenders should be sentenced. I imposed fines on the offenders, and the Public Prosecutor has appealed against this sentence.
FactsThe offenders, Fan Ying Kit and Wong Cui Ling, were in a relationship at the material time. Wong was an Equities Electronic Execution Officer with UBS Securities Pte Ltd (“UBSS”), while Fan was an Assistant Manager with Philips Securities Pte Ltd (“Philips”). They are now married. The transactions that gave rise to their offences were conducted on two trading accounts belonging to Goi Siew Hiok, who is Wong’s mother. These trading accounts were held with Philips and with Kim Eng Securities Pte Ltd (“Kim Eng”).
Unauthorised Trading (Fan: DAC 32734/2010; Wong: DAC 32798/2010)Between 10 December 2007 and 30 April 2008, Fan and Wong engaged in 96 personal trade contracts on Goi’s Philips trading account, making a net contra gain of S$23,567.66. They also conducted 54 personal trades on Goi’s Kim Eng trading account between 16 May 2008 and 27 June 2008, making a net contra gain of S$7,345.68. These trade contracts were executed with Goi’s consent, but without the knowledge or consent of the trading houses, Philips and Kim Eng. The trading houses would not have allowed the trade contracts if they had known that they were not done by Goi.
Fan and Wong thus faced two charges each under section 201(b) of the Securities and Futures Act (Chapter 289, 2006 Revised Edition) (“SFA 2006”) read with section 109 of the Penal Code (Chapter 224) for conspiring with each other to deceive the trading houses into believing that the trades belonged to Goi, when this was not so.
They each pleaded guilty to one charge for the unauthorised trading which concerned the transactions carried out on Goi’s Philips trading account. The remaining charge was taken into consideration for the purpose of sentencing. The trades were entered by Fan with Wong’s concurrence. During the period that these transactions took place, the total buy amount was S$1,849,386.11, while the total sell amount was S$1,867,220.05.
Front Running Among these unauthorised transactions were the transactions that were front-run. The offence of front running, or failing to give priority to a client’s trades, is found in section 122(1)(b) of the SFA 2006. Essentially, Wong, as a representative of UBSS, a holder of a capital markets licence, when acting on her own account or on behalf or a person associated with her or connected to her, could not enter into a transaction for the purchase or sale of shares if an institutional client of UBSS’s (“Clients”) had instructed her to purchase or sell shares in that counter and she had not complied with those instructions. For the present purposes, parties agreed that Wong would not be taken to have complied with those instructions until she had sold/bought
Between 31 March 2008 and 30 April 2008, Wong passed information on her Clients’ trades to Fan. Fan would then enter trades on Goi’s Philips trading account, ahead of trades that Wong would enter for her Clients. Fan also entered trades in the opposite direction to close off Goi’s position within the day, on all but one occasion. On 41 out of 47 occasions, the trades in the opposite direction in Goi’s account were matched by trades executed by Wong on her Clients’ behalf. Fan and Wong made a total contra gain of S$21,487.65 from these trades.
They each faced 62 charges under section 122(1)(b) of the SFA 2006 read with section 109 of the Penal Code, for conspiring to execute transactions on Goi’s trading account when Wong had not yet complied with her Clients’ instructions. They each pleaded guilty to 20 of these charges (with the remaining 42 taken into consideration for the purpose of sentencing). Fourteen of the proceeded charges were in respect of transactions that occurred on 2 April 2008 concerning a counter named Beauty China Holdings Limited (“Beauty China”), while six were for transactions that occurred on 11 April 2008 concerning a counter named China Fishery Group Limited (“China Fishery”). The details of these offences are set out below.
Beauty China (Fan: DAC 32749/2010 – 32762/2010; Wong: DAC 32813/2010 – 32826/2010)On 2 April 2008 at 080352 hours, Wong accepted Clients’ instructions to sell 716,000 shares of Beauty China. She sold the shares in batches throughout the day, and only completed the sale at 170500 hours.
Between 090010 and 164409 hours, Fan entered 14 sell orders in Goi’s Philips trading account for Beauty China shares. He also entered various buy orders on Goi’s trading account. This was done with Wong’s concurrence and resulted in an intra-day contra gain of S$2,733.37. These transactions were carried out for their own benefit and the sell orders were made before Wong completed the sale for the Clients. She thus failed to give priority to the Clients’ trades.
The details of the trades were as follows1 (the trades in
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