Administrative Actions in 2010

No.

Nature of Misconduct

Parties Involved

Brief description of misconduct

Action Taken

1.

Breach of Section 65(1)(g)(iv) and Section 65(1)(l) of the Capital Markets and Services Act 2007 for having engaged in improper business practice which reflected discredit on his method of conducting business, and had carried on his regulated activity in a manner that was dishonest and unfair

Teo Chee Cheong (a Capital Markets Services Representative’s Licence holder carrying out dealing in securities for TA Securities Holdings Berhad)

(a)

Engaged in intra-day short selling

(b)

Used another licensed representative’s account to execute the short selling trades

At the time of short selling, Teo Chee Cheong was not a registered proprietary day trader (PDT).

(a)

Licence suspended for four (4) weeks

(b)

Penalty of RM60,000

(c)

Extra 10 CPE points

2.

Breaches:

Section 33B(3) Securities Commission Act 1993 and section 6(4) of the Malaysian Code on Take-overs and Mergers 1998

Dato’ Sufri bin Hj Mohd Zain and his concert parties, namely Koleksi Aman Sdn Bhd and TRC Capital Sdn Bhd.

Dato’ Sufri and his concert parties acquired more than 2% shares in TRC Synergy Berhad and failed to undertake a mandatory offer in the company.

(a)

Penalty of RM100k

(b)

To dispose all the acquired shares within 2 years.

3.

Breach of Section 356 of the Capital Markets and Services Act 2007 for failure to comply with the Securities Commission’s Guidelines and Rules of Bursa Malaysia Derivatives Berhad

Okachi (Malaysia) Sdn Bhd(a Capital Markets Services Licence holder carrying out trading in futures contracts)

(a)

Allowing unlicensed persons to deal in futures contracts

(b)

Lack vigilance towards anti-money laundering requirements in particular on the assessment of risk upon clients’ requests to transfer funds to third parties

(c)

Failed to conduct proper Know Your Client (“KYC”) in the opening of accounts

(d)

Unauthorised use of clients’ accounts

(e)

Allowing clients and a local participant with insufficient margin positions to undertake new derivative positions

Penalty of RM275,000

4.

Breach of Section 356 of the Capital Markets and Services Act 2007 for failure to comply with the Securities Commission’s Guidelines and Rules of Bursa Malaysia Securities Berhad

JF Apex Securities Berhad(a Capital Markets Services Licence holder carrying out dealing in securities, trading in futures contracts and investment advice)

(a) Allowing unlicensed persons to deal in securities
(b) Material errors and irregularities in back-office system
(c)

Giving preferential brokerage rate that is below the minimum prescribed retail brokerage rate to clients

Penalty of RM125,000

5.

Breach of Section 33B(3) Securities Commission Act 1993 and Section 6(4)(b) of the Malaysian Code of Take-Overs and Mergers 1998 (“the Code”)

Ancom Berhad (“Ancom”)

Ancom failed to carry out mandatory offer to shareholders in Nylex (M) Berhad (“Nylex”) in accordance with requirements of the Code when it acquired more than 2% of voting shares in Nylex.

(a)

Penalty of RM100,000

(b)

Reprimand

6.

Breach of Section 38 of the Malaysian Code on Take-overs and Mergers,1998

OSK Investment Bank Berhad (14152-V)

OSK Investment Bank Berhad (OSK) had failed to disclose in the offer documentation the details of shareholdings and dealing in Johor Land Berhad’s securities by the director of Johor Corporation, Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub, who had disposed of his shares held in Johor Land Berhad through the open market during the offer period.

Reprimand

7.

Breach of Section 60(1)(b) read together with Section 356(1)(a) of the Capital Markets and Services Act 2007 for failure to submit an application for licence renewal not later than thirty days before its expiry

PricewaterhouseCoopers
Capital Sdn Bhd
(676054-V)

(a Capital Markets Services Licence holder carrying out advising on corporate finance)

The company failed to submit its application for licence renewal not later than thirty days before the expiry

Penalty of RM20,000

8.

Breach of Sections 64(1) and 356(1)(a) of the Capital Markets and Services Act 2007 (“CMSA”)

SJ Asset Management Sdn Bhd
(223993-P)

(a Capital Markets Services Licence holder carrying out fund management activities)

  • Failure to comply with relevant requirements of the CMSA and the Guidelines on Compliance Function for Fund Managers (“Compliance Guidelines”) in relation to safeguard of clients’ assets;
  • Furnishing of false and/or misleading information or documents to the SC;
  • Engaging in business practices that were deceitful and/or improper;
  • SJAM is unable to act in the best interest of clients in light of the discrepancies in its records and custodian statements; and
  • The SC is not satisfied with the financial standing of SJAM, in light of its inability to operate as a going concern.

Revocation of licence

9.

Breach of Section 67 of the Capital Markets and Services Act 2007

FA Securities Sdn Bhd (a Capital Markets Services Licence holder carrying out in dealing securities)

Carrying out regulated activity without the SC’s consent despite not meeting the minimum financial requirements.

Reprimand

10.

Breach of Section 356(1) of the Capital Markets and Services Act 2007 (“CMSA”)

Mayban Investment Management Sdn Bhd (“MIMSB”)(a Capital Markets Services Licence holder carrying out dealing in securities and fund management)

(a)

Failure to comply with several requirements of the CMSA, the Guidelines on Compliance Function for Fund Managers (“Compliance Guidelines”) including having adequate measures to safeguard clients’ assets, and policies and procedures to address conflicts of interest situations

(b)

Board of Directors’ failure to put in place adequate internal controls and policies and procedures to ensure compliance with all laws, regulations, guidelines and code of conduct

    Penalty of RM100,000

    Directive requiring the Board of MIMSB to implement its Remedial Action Plan.

    11.

    Breach of Section 41 of the Securities Industry Act 1983 (SIA) for engaging in short-selling and breach of Section 17(1)(d) and the Schedule to the SIA for having engaged in improper business practice which reflects discredit on his method of conducting business, and had not carried on his regulated activity efficiently , honestly or fairly

    Mohd Azami bin Ghazali

    (a Capital Markets Services Representative’s Licence holder carrying out dealing in securities for HwangDBS Investment Bank Berhad)

    Engaged in intra-day short selling

    (a)

    Licence suspended for four (4) weeks

    (b)

    Penalty of RM60,000

    (c)

    Extra 10 CPE points

    12.

    Breach of Section 98 of the Capital Markets and Services Act 2007 (CMSA) for engaging in short-selling and breach of
    sections 65(1)(g)(iv) and 65(1)(l) CMSA for having engaged in improper business practice which reflects discredit on his method of conducting business, and had not carried on his regulated activity efficiently, honestly or fairly

    Tan Kuan Choong

    (a Capital Markets Services Representative’s Licence holder carrying out dealing in securities for HwangDBS Investment Bank Berhad)

    Engaged in intra-day short selling

    (a)

    Penalty of RM2,000

    (b)

    Extra 10 CPE points

    13.

    Breach of Section 65(1)(g)(iv) of the Capital Markets and Services Act 2007 (CMSA) for engaging in business practices which appear to be improper and reflect discredit on his method of conducting business, and Section 65(1)(l) CMSA for not carrying out his regulated activity as a licensed representative efficiently, honestly or fairly.

    Chin Chee Nang

    (a Capital Markets Services Representative’s Licence holder carrying out dealing of securities for Hong Leong Investment Bank)

    Chin had made improper order placement of shares in 7 counters using a client’s account without the client’s knowledge and authorisation.

    (a)

    Reprimand

    (b)

    Suspension of four (4) months

    14.

    Breach of Section 65(1)(g)(iv) of the Capital Markets and Services Act 2007 (CMSA) for engaging in business practices which appear to be improper and reflect discredit on her method of conducting business, and Section 65(1)(l) CMSA for not carrying out her regulated activity as a licensed representative efficiently, honestly or fairly.

    Tan Phaik Yen

    (a Capital Markets Services Representative’s Licence holder carrying out dealing of securities for HwangDBS Investment Bank Berhad)

    Tan had made improper order placement of shares in 1 counter.

    (a)

    Reprimand

    (b)

    Suspension of one (1) month

    All administrative actions taken by the Securities Commission is subject to the aggrieved person’s right to appeal to the Commission for a review of the decision under section 146 of the SCA or section 364 of the Capital Markets & Services Act 2007 within 30 days of the decision at first instance.