CMFAS RES 1A Market Conduct question: civil penalty regime

CMFAS RES 1AMarket Conduct

Under the civil penalty regime: (a) MAS may bring an action in court under SFA s.232 without a criminal prosecution. (b) The penalty can be a multiple of the profit gained or loss avoided. (c) MAS may commence a civil penalty action after the person has already been convicted of the criminal offence for the same contravention. (d) Investors who suffered loss may have a statutory right to compensation under s.234. Which of the following are CORRECT?

A (c) only
B (a) and (c) only
C (a), (b), (c) and (d)
D (a), (b) and (d) only

Show the answer and explanation

Answer: D. (a), (b) and (d) only

Section 232 lets MAS seek a civil penalty in court, calculated by reference to the profit gained or loss avoided; s.233 bars a civil penalty action once the person has been convicted or acquitted of the offence for the same contravention or while criminal proceedings are pending; s.234 gives contemporaneous traders who lost money a compensation claim.

Common mistake

Civil and criminal routes are alternatives for the same contravention (s.233).

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Mr Iskandar is a remisier with no connection to Pico Ltd. At a wedding a stranger tells him that Pico will announce a large contract loss the following week. He believes it, sells his Pico shares, and tells his brother-in-law, who also sells. The announcement is made and the price falls 22 per cent. What must be established for liability under SFA s.219?A director in possession of unannounced good results tells his brother to buy the company's shares. Even if the director never trades himself, he may be liable because the prohibition also covers Mr Tan, assistant to the CEO of an SGX-listed company, used trading accounts belonging to Mr Yap to buy the company's shares ahead of a takeover announcement and later to sell ahead of the withdrawal of the offer. Which of the following consequences followed?

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