Kenyataan Media
BURSA MALAYSIA SECURITIES REPRIMANDS, FINES AND SUSPENDS WONG CHIN HOONG FOR ENGAGING IN MANIPULATIVE DEALING ACTIVITIES
Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded, imposed a fine of RM50,000 and suspended/restricted (as the case may be) Wong Chin Hoong (WONG) for 6 months as/from being a Registered Person, for engaging in manipulative dealing activities in the securities of Nakamichi Corporation Bhd (NAKA).
WONG, who was at the material time of the breach a Commissioned Dealer’s Representative (CDR) of Kenanga Investment Bank Bhd (KIBB) at its The Curve, Mutiara Damansara branch, had contravened and/or triggered the provisions of Rules 401.1(3), 404.3(1) and 1302.1(1)(a)&(g) of the Pre-Revamped Rules of Bursa Malaysia Securities.
Bursa Malaysia Securities places a strong emphasis on the need to maintain a fair and orderly market and will not tolerate any acts or practices which could lead to false trading, manipulative activities and/or compromise the integrity of the market. Bursa Malaysia Securities will not hesitate to take appropriate actions against anyone who engages in such misconduct which commensurate with the severity of the breach, including suspension/ restriction/striking off a Registered Person from the Register and imposition of fines.
BACKGROUND
The finding of the breach and the imposition of the sanctions on WONG were made pursuant to Rule 15.02 of the Rules of Bursa Malaysia Securities upon completion of due process and after taking into consideration all facts and circumstances, including that:
- WONG had carried out dealing activities in NAKA shares over a period of time in his two clients’ accounts which had resulted in false or misleading appearance of active trading in, the market for and/or the price of NAKA shares. The characteristics and impact of the dealing activities undertaken by WONG during the relevant period include the following:-
- the repetitive execution of buy orders including during afternoon trading session and/or at or near the close of market at successively higher prices which had caused the price of NAKA shares to close at the daily high on numerous trading days;
- the repetitive execution of buy orders at increasing bids including buy orders in small quantities (i.e. in 100 units) at prices higher than the last done price that took up the seller on board (in small quantities) had given rise to price maintenance/increase of NAKA shares (Driving Up the Price activities);
- the practice of executing buy orders of small quantities at increasing bids and at the same time placing larger buy orders at lower prices had distorted the actual demand and supply of NAKA shares during the material time and gave a false appearance as to the depth and market interest/the demand for the shares whilst frustrating/influencing the (genuine) sellers to sell to WONG’s clients’ larger buy orders at lower price in reducing their transaction costs; and
- the increasing bids small quantity buy orders repeatedly undertaken over a period of time had given rise to artificial price support with artificial volatility/price fluctuation as well as the false/misleading appearance of the trading activities of/market for NAKA shares. This is because the investing public would not know that these trading activities that raised the price whenever the share price retreated to lower level or caused the price to move to the next level were due to the execution of small quantity buy orders by WONG, a single DR acting for his 2 clients. In addition, the dealing activities had impacted the maintenance of a fair and orderly market of NAKA shares.
- As a Registered Person acting in the capacity as a Dealer’s Representative (DR), WONG was obligated to carry out his duties including ensuring maintenance of a fair and orderly market and fair dealing. As such, it is not acceptable for WONG to merely execute orders as instructed by his clients/act (i.e. act as a mere order-taker) without making proper assessment of the orders received/executed and exercising reasonable due care and diligence in undertaking dealing activities for his clients so as to avoid/prevent/refrain from any manipulative/false dealing activities.
- As a DR, WONG must at all times:
- observe professional standards of integrity and fair dealing including exercise due care and diligence in the execution of trades;
- carry out his duties efficiently and in a manner which contributes to the maintenance of a fair and orderly market; and
- avoid or refrain from engaging or becoming a party to, or getting involved in any acts or practices which might lead to a false/misleading appearance of active trading in, the market for or price of the securities.
ADDENDUM
Rules 401.1(3), 404.3(1) and 1302.1(1)(a) & (g) of the Pre-Revamped Rules of Bursa Malaysia Securities (the Rules) state, amongst others, that:
- DRs shall avoid any act or practice which might lead to a false or misleading appearance of active trading in any securities on the stock market of the Exchange or a false or misleading appearance with respect to the market for, or the price of, any such securities or directly or indirectly be tantamount to stock market manipulations;
- every DR employed or engaged by the Participating Organisation shall at all times observe professional standards of integrity and fair dealing, act honestly and in the best interest of their clients and conduct their business in a manner which contributes to the maintenance of a fair and orderly market; and
- any Participant who, in any circumstances, directly or indirectly commits a breach of or violates any of the Rules or fails to perform his/her duties efficiently, honestly or fairly shall be liable and be dealt with in accordance with the provisions of the Rules relating to the same.