Former Sinomem CFO to pay S$316,000 civil penalty to MAS for insider trading

SINGAPORE — The Monetary Authority of Singapore (MAS) has taken civil penalty action against the former chief financial officer (CFO) of water treatment firm Sinomem Technology Ltd and an asset management firm for insider trading.

Mr Pu Weidong and Triumpus Assets Management Pte Ltd will have to pay S$316,000 as a civil penalty for the insider trading of shares in Sinomem in 2009, the MAS said on Tuesday (May 3).

Mr Pu was the CFO of Sinomem when the contraventions took place. He is also the sole director and shareholder of Triumpus.

Between March 2 and 27, 2009, Mr Pu and Triumpus purchased about 4.6 million shares of Sinomem when Mr Pu possessed price-sensitive information concerning a proposed share buyback offer by the water treatment firm. The offer was subsequently announced on March 27, and Mr Pu and Triumpus made a profit of S$49,542 on these trades.

Between August 25 and 31 the same year, Mr Pu and Triumpus sold about 14.2 million Sinomem shares on confidential, price-sensitive information Mr Pu possessed on a proposed placement of shares by Sinomem. Mr Pu and Triumpus did not make any profit or loss on these trades.

The MAS said it commenced a civil penalty action in the State Court of Singapore against Mr Pu and Triumpus for insider trading in Sinomem’s shares under the Securities and Futures Act (SFA) in February last year.

Mr Pu and Triumpus admitted to contravening the Act and will pay to MAS a civil penalty of S$316,000, as well as S$61,610.75 for the legal costs and disbursements incurred by MAS.

Mr Pu has also given a voluntary undertaking not to be a company director or be involved in the management of a company for one year, with effect from July 3, 2016.

Under section 232(1) of the SFA, whenever it appears that any person has contravened any provision in Part XII of the SFA, the MAS may, with the consent of the public prosecutor, bring an action in a court against the person to seek an order for a civil penalty in respect of that contravention.

The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004.