SINGAPORE – The Singapore court on Thursday (OCT 15) sentenced a former CGS-CIMB Securities employee to 20 months and 18 weeks’ jail for her involvement in manipulating trading in the shares of Catalist-listed Koyo International between August 2014 and January 2016.
Lau Wan Heng, 62, initially a broker and later a remisier at the brokerage firm, will begin her sentence on Oct 29.
Lau 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 CEO in January 2015, where he then asked for Lau’s assistance in the scheme.
Between February 2015 and October 2015, Lau approached nine of her clients at CGS-CIMB, and convinced them to allow her to use their trading accounts to trade Koyo shares, in which she performed trades from February that year till January 2016.
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 any profits made through their accounts, and 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.
However, Lau 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 the respective firms to carry out the trades. Her brother also handed over two more accounts he opened in his name to her. Eventually, Lau did not leave CGS-CIMB.
Overall, Lau contributed to 31 of the total 53 trading accounts used in the scheme.
On Thursday, she was convicted on 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), and 12 counts of unauthorised trading under section 201(b) of the SFA. Nineteen other similar charges were taken into consideration for sentencing purposes.
Additionally, as a result of legal action taken against Lau 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 have been sentenced. Lin and three others have been charged, and their cases are ongoing.
Koyo shares closed down 0.5 cent or 6.25 per cent at 7.5 cents on Thursday.