To balance market integrity with proportionality as well as ensure effective and credible deterrence, the enforcement
strategy pursued in 2021 was focused on achieving swift, effective and targeted outcomes.
ENFORCEMENT ACTIONS 2021
Ten criminal charges were filed against six individuals and one PLC for unlicensed activities and furnishing false information in financial reporting. Additionally, one criminal forfeiture application was filed against an individual and a private limited company in connection to money laundering offences. Three convictions were secured against three individuals for cases involving insider trading, furnishing misleading information in financial reporting, and failure to appear before an Investigating Officer of the SC in connection with an investigation under the Anti-Money Laundering, Anti-Terrorism and Proceeds of Unlawful Activities Act 2021 (AMLATFPUAA).
6 individuals and 1 entity charged
10 criminal charges filed
1 individual and 1 entity involved in criminal forfeiture applications
1 criminal forfeiture application
3 convictions obtained
3 custodial sentences
RM7,575,000 total fine imposed
On 30 September 2021, Ong Kar Kian (Ong), the former Group Accountant of listed entity Asia Media Group Bhd (Asia Media) faced criminal charges in relation to falsified revenue in Asia Media’s quarterly results for the 4th quarter of 2015.
On 28 and 29 December 2021, the SC charged Serba Dinamik Holdings Bhd (Serba Dinamik), its Chief Executive Officer/Group Managing Director – Dato’ Dr Ir. Ts. Mohd Abdul Karim Abdullah and its officers – Datuk Syed Nazim Syed Faisal, Azhan Azmi and Muhammad Hafiz Othman with furnishing false statement in relation to the revenue figure of RM6.014 billion contained in Serba Dinamik’s Quarterly Report on Consolidated Results for the Quarter and Year ended 31 December 2020.
On 18 October 2021, the High Court dismissed Gan Boon Aun’s (Gan) appeal against his conviction for an offence of knowingly furnishing misleading information to Bursa Malaysia. The misleading information was in relation to Transmile Group Bhd’s (Transmile) revenue in the company’s Quarterly Report on Unaudited Consolidated Results for the Financial Year ended 31 December 2006.
On 3 May 2021, following the investigation conducted by the SC, the Public Prosecutor (PP) filed a Notice of Motion for asset forfeiture under section 56 of the AMLATFPUAA against Havana Bayview Sdn Bhd (Havana Bayview) and Wong Shee Kai (Ricky Wong). The application was filed to forfeit seized property, namely a multi-million ringgit luxury apartment in Kuala Lumpur belonging to Havana Bayview and a sum of RM445,039.28 in Ricky Wong’s personal bank account. This marks the second asset forfeiture application in connection with securities fraud offences.
On 24 March 2021, Uzir Abdul Samad (Uzir), a former director of UAS Management Bistari Sdn Bhd faced three charges in the Johor Bahru Sessions Court for carrying out regulated activities of fund management without a licence and defrauding investors. One of the charges was under section 58(1) of the Capital Markets and Services Act 2007 (CMSA) for holding himself out as a fund manager without the requisite Capital Markets Services Licence (CMSL) issued by the SC at the material time.
Fang Siew Yee (Fang), a former Executive Director of Three-A Resources Bhd (3A), pleaded guilty to nine charges relating to insider trading on 24 March 2021. Fang was initially charged in 2016 with one charge of communicating material non-public information to her uncle, Fong Chiew Hean under section 188(3) of the CMSA. The information was in relation to the proposed collective venture between the businesses of 3A and Wilmar International Ltd (Wilmar) involving a 20% private placement of the issued and paid-up share capital of 3A to Wilmar.
On 13 October 2021, the SC entered into a regulatory settlement with lawyer Dato’ Sreesanthan Eliathamby (Sreesanthan) for insider trading breaches under section 89E(2)(a) of the SIA and 188(2)(a) of the CMSA. Sreesanthan paid a sum of RM900,000 as settlement for acquiring shares of Maxis Communications Bhd (Maxis), UEM World Bhd (UEM), and VADS Bhd (VADS) while in possession of material non-public information.
The SC filed six civil actions in 2021, against 10 individuals. Four consent judgments were also recorded between the SC and eight individuals.
6 civil actions filed
10 individuals
No. of judgments obtained after full trial: 1 case involving 6 individuals
No. of consent judgments recorded: 4 cases involving 8 individuals
Amount disgorged/restitution order by court: RM16,042,991.41
Amount of civil penalties imposed: RM2.5 million
On 30 March 2021, the Kuala Lumpur High Court ordered RBTR Asset Management Bhd (RBTR) and five other defendants namely Locke Guarantee Trust Ltd (LGT) New Zealand, Locke Capital Investments Ltd (LCI) British Virgin Island, Isaac Paul Ratnam, Joseph Lee Chee Hock, and Nicholas Chan Weng Sung (the Defendants) to pay RM13.352 million in restitution for their role in the Euro Deposit Investment (EDI) scheme.
9 cases of regulatory settlements entered
10 individuals involved
RM4,962,565.81 amount disgorged
RM2,741,864.85 amount restituted
721 investors restituted
RM1,601,388.79 amount earmarked for further restitution
501 investors earmarked for further restitution
3 directors of PLCs
1 licensed person
1 private individual
5 directors of PLCs
1 licensed person
1 private individual
136
Administrative sanctions imposed
1
Restitution amounting to RM3,000
100
Reprimands
11
Directives issued
21
Penalties imposed amounting to RM2,865,500
1
Refusal to accept/ consider submissions to the SC
2
Public statements issued
On 26 July 2021, the SC reprimanded and issued a directive against Binance Holdings Ltd, Binance Digital Ltd, Binance UAB, Binance Asia Services Pte Ltd, and Zhao Changpeng (Zhao), Chief Executive Officer and Director of Binance Holdings Ltd for operating a DAX without registering as RMO with the SC.
Apart from the formal enforcement tools, the SC also relies on its non-statutory enforcement tools when conducting monitoring, gatekeeping, and supervisory functions. To this end, Infringement Notices are issued for breaches of securities laws or the SC’s Guidelines that do not warrant a criminal, civil, or administrative action. A total of 133 Infringement Notices were issued in 2021, as detailed below:
41 supervisory letters involving infringement issued
22 warning letters issued
42 non-compliance letters issued
28 cease and desist letters issued
Following information received from the public, the SC issued a cease and desist order to RimauSwap (https://rimauswap.finance/) for operating a decentralized exchange (DEX) without authorisation. RimauSwap was also placed on the SC’s Investor Alert List. The SC has not authorised any DEX operators in Malaysia. Investors were warned that those who trade with unlicensed or unregistered entities or individuals are not protected under the Malaysian securities laws, and are exposed to risks, such as fraud and money laundering.
The SC had completed its investigation on AMMB Holdings Bhd (AmBank Group) for engaging in acts to defraud the Government of Malaysia (GOM) and 1MDB as well as non-compliance with the SC’s relevant laws and guidelines. The breaches relate to:
On 26 February 2021, AmBank Group agreed to pay RM2.83 billion to GOM for a global settlement on all outstanding claims and actions in relation to AmBank Group’s involvement in 1MDB related matters.
Recognising that securities offences have no borders and may involve multiple jurisdictions, the SC’s enforcement efforts were further enhanced via successful collaboration with other law enforcement agencies and/or regulators within and outside Malaysia.
The SC was involved in joint operations co-ordinated by the National Anti-Financial Crime Centre along with BNM, Royal Malaysia Police (PDRM), Malaysian Anti-Corruption Commission (MACC), Companies Commission of Malaysia (CCM) and Cyber Security Malaysia.
For international co-operation, the IOSCO’s Multilateral Memorandum of Understanding (IOSCO MMoU) is the main mechanism used for information sharing and evidence gathering on cross-border misconduct. In 2021, the SC liaised with 15 foreign supervisory authorities pursuant to the IOSCO MMoU, to seek assistance from its counterpart.
To expedite the outcome of some of the SC’s enforcement actions, dedicated internal Task Forces were formed. In 2021, four separate dedicated Task Forces were set up to deliver swifter enforcement outcomes.
The SC also enhanced its internal processes by implementing a Fast Track Enforcement Process that facilitates an expeditious review and investigation on identified cases.
The SC established its in-house Digital Forensics (DF) team in September 2020 as part of its initiative to increase efficiency. In 2021, there was a substantial increase of more than 500% for DF related requests (as shown in the table below), with a marked improvement of turnaround time from the previous three to six months to an average of three to six weeks in responding to the requests made.
Year
Total Number of Requests
2020
8*
51
} >500% increase
The DF team continued to improve its scope and capabilities, keeping abreast with developments in the digital forensics space through established collaborations with the local and international digital forensics community.
The SC formulated an efficient, safe, and secure infrastructure to ensure its investigation officers (IOs) are able to continue discharging their responsibilities
in a conducive manner while adhering to the health and safety SOPs, which include protocols for virtual statement recording from witnesses.
Collaboration and exchange of knowledge, skills, and expertise among law enforcement authorities both inside and outside Malaysia are critical in driving the success of the SC’s investigations. In this respect, the SC had the opportunity to obtain valuable insights from experts from the US on digital asset investigation through its collaboration with the US Embassy in Kuala Lumpur. Similar efforts would continue with other international counterparts on a regular basis to discuss enforcement and supervisory issues, as well as enhancing information sharing protocols.
