I am all in favor of enforcement, so kudos to Bursa.
Also, the charges are spelled out in detail, which is good for transparency.
What is missing however is when these illegal activities took place, there is no timeline in the announcement.
Some details of what had happened:
- Chong had failed to authenticate the application to open an account for a client (the said client) in the manner as required under the rules and falsely declared authentication of the account opening forms. In this regard, the account opening forms were not executed by the said client in person before him but instead, the forms were submitted by a third party.
- Chong had allowed the said client’s account to be operated by a third party who had unlawfully undertaken numerous trades in the account. These unauthorised trades gave rise to losses in the account which was disputed by the said client. In this regard, the losses suffered were subsequently set off against Chong’s commission and security deposit lodged with the Participating Organisation (PO). In undertaking these unauthorised dealing activities, Chong was noted to have acted upon the instruction given by the third party who was not a person allowed and authorised, in writing, to trade on behalf of the said client.
- Chong’s dealing in the securities of YGL and HDISPLAY in the said client’s account constituted false trading activities/unethical trading as there were rollover activities in the said client’s account. This gave rise to a false or misleading appearance of active trading or the market for the securities concerned.
- fine of RM 100,000
- 12 months suspension as registered person
In my opinion, persons who touch the accounts of clients and/or are caught in false and unethical trading should be barred for life from the securities industry. Set a clear example, and make sure every remisier knows about it.
The other issue is that there is mentioning of a "third party", surely this person should also be punished.
The companies were listed on the ACE market:
- HiDisplays a company involved in LCD panels suffered a large loss of RM 42 million in 2009. Trading was suspended on July 26th 2011.
- YGL Convergence is a tiny company with some accumulated losses of 3.2 million according to its 2010 year report.