Singapore authorities raided a number of brokerages in a probe of possible breaches of the securities law, while the stock exchange reported several cases related to alleged insider trading and market manipulation as the city-state sought to protect its reputation as a financial center.
The Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) 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 yesterday.
Singapore has worked to restore confidence in the stock market after a penny-stock rout in 2013 that prompted the city-state’s largest securities-fraud probe, with Singapore Exchange Ltd (SGX) chief executive officer Loh Boon Chye (羅文才) making it his top priority.
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.
Investigations are ongoing, the country’s central bank and market regulator said in a statement on the latest probe, without providing further details.
In a separate statement, the SGX said: “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.”
The MAS declined to say if the raids were linked to the SGX cases referred to it in the first quarter.
“As a matter of policy, MAS does not comment on its supervisory dealings with specific financial institutions,” the central bank said in an e-mailed response to questions.
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 yesterday, citing unidentified market sources.
The newspaper said people were taken in for questioning, who were believed to be remisiers, referring to securities trading representatives who are usually paid on a commission basis.
The authorities also took the mobile phone and laptop of a remisier at OCBC Securities, according to a person with direct knowledge of the matter.
No employee was affected and the company’s properties were not confiscated as part of the investigation, the person said, asking not to be identified because of the ongoing investigation.
The exact nature of the investigation is not known, the newspaper said.
SGX shares fell 0.6 percent to S$7.75 as of 3:26pm local time, extending Thursday’s 3.1 percent decline and set for their biggest two-day slump in more than two months.
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