He is the first person in the country to be convicted of operating an illegal online investment scam, after the Securities Commission Malaysia’s (SC) investigations found that he had raised RM65 million from 52,000 investors in 2007 via the website www.danafutures.com. The website claimed to have been an asset management and investment group focusing on business and fund management.
Phazaluddin was also convicted of three counts under the Anti Money Laundering and Terrorism Financing Act 2001 (AMLATFA) for taking part in money laundering activities involving a sum of RM1.3 million with two years imprisonment for each charge. The Court ordered Phazaluddin to serve the imprisonment term for all the offences concurrently.
The SC, which carried out the trial jointly with the Attorney General’s Chambers, has urged the court to impose a deterrent sentence as it involves a large amount of investors’ fund.
Sessions Court judge SM Komathy Suppiah in her decision categorically stated that there is a compelling need to impose a deterrent custodial sentence rather than a fine.
The custodial sentence meted out by the court is a stern warning to future offenders that violation of the public trust on such a large scale will not be treated lightly by the regulators and the courts.
It also serves as a reminder to the investing public to be extremely cautious of any investment scheme which looks legitimate, professionally managed and offers attractive investment returns or opportunities.
Phazaluddin was charged on 29 February 2008 for an offence under section 15A(1) of the Securities Industry Act 1983 together with three charges under section 4(1) of the AMLATFA.
SECURITIES COMMISSION MALAYSIA
