Kuala Lumpur, 5 May 2011
Jail sentence for illegal fund manager upheld

Kuala Lumpur High Court judge, Dato Hj Ghazali Hj Cha, today affirmed the conviction of businessman Phazaluddin Abu, 49, under section 15A of the Securities Industry Act 1983 (SIA) for acting as a fund manager without a licence through the website www.danafutures.com.

In dismissing Phazaluddin’s appeal against the Sessions Court’s decision, Judge Dato Hj Ghazali also upheld the convictions under the Anti Money Laundering and Anti Terrorism Financing Act 2001 (AMLATFA) for dealing with the moneys collected via the unlicensed scam.

The High Court maintained the findings that Phazaluddin was the mastermind behind the website and that he had collected the moneys. His sentences of 4 years imprisonment under the SIA, and 2 years imprisonment for each of the 3 convictions under AMLATFA, were also upheld.

The High Court acknowledged that over 52,000 investors had invested in the unlicensed scam which resulted in a collection of over RM65 million. A whole unit in the Securities Commission was established to investigate internet based fraudulent schemes such as this including forensic expertise and a lot of public expense was incurred.

29 witnesses were called through the three year trial, which resulted in the first conviction in the country for an illegal online investment operation.

Phazaluddin was directed to serve his imprisonment sentence immediately as his request for a stay of execution pending appeal was dismissed. The High Court agreed that deterrent punishment on this type of securities laws breaches was essential.