Kenyataan Media
BURSA MALAYSIA SECURITIES REPRIMANDS, FINES AND SUSPENDS JOANN LIM PHAIK GIM FOR MISCONDUCT / UNETHICAL CONDUCT
Bursa Malaysia Securities Berhad (Bursa Malaysia Securities) has publicly reprimanded, imposed a fine of RM20,000 and ordered a restriction on Joann Lim Phaik Gim (Joann) from being registered as a Registered Person of Bursa Malaysia Securities for 6 months (Restriction Order), arising from her misconduct/unethical conduct whereby she had disclosed her client’s confidential trading information to a third party and conducted her personal trades in her family members’ accounts without disclosing the trades to her employer. Joann is also required to undergo training on the conduct or professionalism of Dealer’s Representatives (DRs) and market offences if she is registered as a Registered Person after expiry of the Restriction Order.
Joann, who was at the material time of the breach a Salaried DR of JPMorgan Securities (Malaysia) Sdn Bhd (JPMorgan) at its Principal Office, contravened and/or triggered the provisions of Rules 404.3(1)(a) & (b), 1302.1(1)(a), (g), (i)(iii) and 702.4(1) of the Rules of Bursa Malaysia Securities.
Bursa Malaysia Securities views seriously misconducts that impinge on the integrity and professional conduct/etiquette of DRs and Registered Persons and which compromise client’s protection as such misconducts may adversely affect and damage market integrity and market confidence. Bursa Malaysia Securities will not hesitate to take appropriate actions against anyone who fails to carry out their duties honestly, with utmost integrity and act in the best interest of the client and compromises the confidentiality of clients’ information, including suspending or striking off a Registered Person from the Register or imposing a fine commensurate with the severity of the breach.
BACKGROUND
The finding of the breach and the imposition of the sanctions on Joann were made pursuant to Rule 1301.2 of the Rules of Bursa Malaysia Securities upon completion of due process and after taking into consideration all facts and circumstances, including the severity of the breach and her co-operation to Bursa in respect of the breach. In particular, the following were noted:-
- Joann had:-
- disclosed a client’s confidential trading information to a third party which she knew was used/to be used by the third party for trading; and
- carried out her numerous personal trades in the accounts of her family members maintained with other Participating Organisations (PO) over a period of time and profited from these trades which were concealed from or never disclosed to her employer, JPMorgan.
- As a DR, Joann ought to have known that:-
- she has a duty to maintain strict confidentiality of the client’s trading information which if shared, could facilitate/be used/abused by any third party to engage in unlawful activities including market offences, for instance front-running or insider trading activities; and
- DRs must not trade using another person’s account even if the account holder has consented to the use of his/her account. By using other persons’ accounts to carry out her personal trades and not disclosing the trades to JPMorgan, Joann had circumvented the rules. Among others, the rules prohibit DRs from maintaining trading account with another PO, require DRs to disclose their trades to the PO or seek approval of the PO for their trades which are essentially aimed at curbing abuses including market abuses which may be undertaken by the DRs in/through other persons’ accounts. By using her family members’ accounts to carry out her personal trades, Joann had concealed her trades from JPMorgan and prevented JPMorgan from monitoring Joann’s trades and undertaking its supervisory function under the rules effectively.
The duty to preserve confidentiality of a client’s trading information is one of the basic and fundamental obligations of a DR which must be observed at all times. Hence, Bursa Malaysia Securities views Joann’s misconducts seriously as she had breached the standard/code of conduct and etiquette expected of a DR. Joann’s misconducts when viewed as a whole brought into question her integrity as a Registered Person of Bursa Malaysia Securities and demonstrated failure on her part to uphold the integrity and professional standards expected of a responsible DR.
As Registered Persons, all DRs must at all times:
- observe professional standards of integrity and fair dealing;
- act honestly and in the best interest of their clients;
- preserve the confidentiality of their clients’ confidential trading information; and
- refrain from undertaking their personal trades in other person’s account(s) and concealing the same from their PO.
ADDENDUM
Rules 404.3(1)(a) & (b), 1302.1(1)(a), (g), (i)(iii) and 702.4(1) of the Rules of Bursa Malaysia Securities (the Rules) state, amongst others, that:-
- DRs shall at all times observe professional standards of integrity and fair dealing and act honestly and in the best interest of their clients.
- Any Participant who, in any circumstances, directly or indirectly commits a breach of or violates any of the Rules or fails to perform his duties efficiently, honestly or fairly or being a DR, unlawfully transacts on another person’s account, shall be liable and be dealt with in accordance with the provisions of the Rules relating to the same.
- All transactions undertaken by an employee, a Commissioner DR and a director shall be disclosed to the PO and the onus of such disclosure is on the employee, Commissioned DR or the director concerned.