Three charged for insider trading in front-running case

SINGAPORE — In the first time that front-running offences are being prosecuted under insider trading in the Republic, the Monetary Authority of Singapore has charged three individuals including a dealer in First State Investments (FSI) Singapore for alleged insider trading in the shares of Allgreen Properties and other companies.

The three individuals — Leong Chee Wai, Toh Chew Leong and E Seck Peng Simon — have been charged for 115, 111 and 107 offences respectively under the Securities and Futures Act, the MAS said in a statement yesterday. It is also the second MAS-led case resulting in criminal prosecution since the Commercial Affairs Department (CAD)-MAS joint investigation regime came into effect last year to boost the probe into market misconduct and crack down on offenders.

According to the first charge sheet, FSI dealer Leong, who was in possession of price-sensitive inside information about Allgreen, had procured Simon to purchase 548,000 shares and short-sell 290,000 shares in the company between July 4, 2007, and Feb 21, 2008, through the latter’s personal trading account in UOB Kay Hian, before FSI completed its order in Allgreen shares.

A front-running offence is one where the perpetrator makes improper use of information about a large order in a security by placing a similar trade in advance in the same security for his or her own benefit.

The inside information Leong had was about FSI’s intended trades in Allgreen in relation to the direction of FSI’s orders, i.e. buy or sell; the size of the orders; price range or price limit of the orders; and the time at which the shares of the company were bought or sold, as well as the time of completion of the FSI’s intended orders in the shares of the company.

Another charge sheet said Leong conspired with Toh to procure Simon to buy 743,000 shares and short-sell about 2.2 million shares in AllGreen on or before Aug 28, 2008, to Aug 17, 2009, through Simon’s personal trading account.

Bail amounts for Leong and Simon have been set at S$300,000 each while that for Toh has been set at S$250,000.