The High Court had in 2022 found Dato’ Raymond Yap Wee Hin liable for insider trading under sections 188(2)(a) and 2(b) of the Capital Markets and Services Act 2007 (CMSA).

In its decision today, Justices YA Datuk Ravinthran a/l N. Paramaguru, YA Dato’ Lim Chong Fong and YA Dato’ Collin Lawrence Sequerah unanimously dismissed Yap’s appeal and upheld the High Court’s judgment ordering him to pay RM3.28 million in disgorgement to the SC. This is equal to three times the losses avoided by Yap as a result of the insider trading.

The Court of Appeal found that section 201(6) of the CMSA clothes the SC with jurisdiction to file civil proceedings for insider trading breaches under section 188(2) of the CMSA.

Yap was also ordered to pay the SC a civil penalty of RM1 million and is barred from being a director of any listed company for five years, starting from the date of the High Court judgment on 7 April 2022.

The breach occurred when Yap disposed 43.8 million Patimas shares held by Law Siew Ngoh, a former Managing Director of Patimas, between June and July 2012.

At the time, Yap was in possession of material non-public information relating to audit queries and issues regarding the suspicious transactions between Patimas and its top debtors.

The matter had been raised and discussed by Ernst & Young Malaysia, Patimas’ external auditor, during a meeting with the company’s management.

On 31 July 2012, Patimas’ Board of Directors announced to Bursa Malaysia that the company would not be able to issue the Annual Audited Financial Statements for the financial period from 1 January 2011 to 31 March 2012 due to unresolved significant audit findings/queries.

The SC views insider trading as a serious breach as it undermines the integrity of the capital market and subsequently erodes investors’ confidence in the stock market. The SC hopes that the decision of the Court of Appeal today sends a clear message that such breaches will not be tolerated by the SC as well as the courts.