Date
27 July 2017
Singapore Exchange Ltd. (SGX) is trying to rebuild investor confidence after a penny stock scandal in 2013. Photo: Bloomberg
Singapore Exchange Ltd. (SGX) is trying to rebuild investor confidence after a penny stock scandal in 2013. Photo: Bloomberg

Singapore raids brokers as exchange reports irregularities

Singapore authorities raided several brokerages last week in a probe of possible breaches of the securities law.

The stock exchange had reported several cases related to alleged insider trading and market manipulation as the city seeks to protect its reputation as a financial center, Bloomberg reported.

The Monetary Authority of Singapore (MAS) and the Commercial Affairs Department are investigating possible contraventions of the Securities and Futures Act and have obtained documents and items from several broking firms and trading representatives, the MAS said Friday.

Singapore has worked to restore confidence in the stock market after a penny stock rout that prompted the city’s largest securities fraud probe.

In that case, three companies suffered an unexplained free-fall that wiped out S$8 billion (US$5.9 billion) during three trading days in October 2013, after the stocks had surged by as much as 1,000 percent over the preceding nine months.

“It helps the image of Singapore as they clamp down on practices such as insider trading or market manipulation,” Bernard Aw, market strategist at IG Asia Pte., was quoted as saying.

“To some extent, this will help restore individual investor confidence in the market. If this relates to trading privileged information then it’s unfair to the individual investors.”

Singapore Exchange Ltd. said in a statement that “in the January-to-March quarter, we referred nine cases to MAS, of which three were related to insider trading and six to market manipulation”.

DBS Vickers Securities Singapore, Maybank Kim Eng Holdings, OCBC Securities and Phillip Securities were among at least four brokerages raided by the MAS and the CAD earlier in the week, the Singapore newspaper Business Times reported, citing unidentified market sources.

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