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Ex-dealer who made $255k from illegally manipulating prices of SGX stocks gets 9 months’ jail

Ex-dealer who made $255k from illegally manipulating prices of SGX stocks gets 9 months’ jail

Source: Straits Times
Article Date: 02 Nov 2024
Author: Toh Yong Chuan

Oh Wee Hian was sentenced to nine months in jail in the biggest case of stock market price spoofing detected in SGX.

For eight months, former dealer Oh Wee Hian manipulated the prices of six Singapore Exchange (SGX) counters by causing small share price movements and profiting from the fluctuations.

These quick-fire deals involved small trades that were placed and cancelled within seconds to spoof the market prices in the trading system.

Oh repeated the ruse 215 times between August 2020 and March 2021, resulting in $255,385 in illicit gains.

On Oct 28, Oh, a 46-year-old Singaporean, was sentenced by District Judge Christopher Goh Eng Chiang to nine months in jail in the biggest case of stock market price spoofing detected in SGX.

From 2005 to 2009, Oh worked as a dealer at brokerages UOB Kay Hian, Credit Suisse Securities (Singapore) and Citigroup Global Markets Singapore Securities where he honed his stock market trading skills.

He was also a web developer and had been unemployed since 2018.

He hatched his plan to manipulate SGX stock prices some time before August 2020.

To do so, he set up two accounts: a trading account with OCBC Securities to trade shares on SGX and a trading account with brokerage IG Asia that offers, among its specialist products, the trading of contracts for differences (CFD).

In CFD trading, a person can trade on the price movements of shares without actually buying or selling them. It was the main tool in Oh’s deception.

Court papers described how Oh manipulated or spoofed the prices of shares in a series of methodical moves that he took just seconds to execute each time.

To lower the price of a counter, he would first use his OCBC account to sell small quantities of 100 to 200 shares at prices below what buyers were offering to pay.

This would artificially lower the market price in the trading system, sometimes by just a fraction of a cent. With the price dip, he would then switch to his IG Asia account to buy a CFD from IG Asia at the artificial low price.

Oh would switch back to his OCBC account, cancel the sell order and instead place a buy order for 100 to 200 shares of the same counter at a higher price than sellers were selling, thus artificially pushing up the market price.

He would then switch to his IG Asia account and sell the CFD back to IG Asia at a higher price than what he bought just seconds earlier, pocketing the price difference as profit. As a final step, he would cancel the buy order in his OCBC account as he had no intention of completing it.

“The accused was well aware that he would be profiting at the expense of IG Asia by manipulating the CFD pricing mechanism. IG Asia would not have fulfilled the accused’s CFD trades if they had known that the market prices were not influenced by genuine market demand and supply in the underlying counter,” according to court papers.

Court documents named the six SGX counters that Oh targeted: Bonvests Holdings, Bund Center Investment, GSH Corporation, Hotel Properties, Sinarmas Land and The Straits Trading Company. These counters were targeted as they were illiquid, the court papers noted.

The bulk of his ill-gotten gains came from 119 instances involving the Bund Center Investment counter, netting him $201,159.

Between August 2020 and January 2022, Oh withdrew $175,810 from his CFD trading account at IG Asia and transferred the money into his personal bank accounts at POSB and OCBC.

He made occasional withdrawals from his POSB account for his living expenses. After he was arrested and charged in 2023, the police froze the $130,198 in his IG Asia and OCBC accounts when he was under investigation.

Oh pleaded guilty to two charges under the Securities and Futures Act for the trades that he made with Bund Center Investment and Sinarmas Land.

Four other charges for the trades for the remaining counters were taken into consideration during sentencing.

During sentencing, Deputy Public Prosecutor (DPP) David Koh asked the State Courts to sentence Oh to between 11 and 14 months’ jail.

“The accused made substantial wrongful gain at the expense of IG Asia,” said DPP Koh in his written submissions, adding: “The offences were also carried out with substantial premeditation and planning.”

Oh’s lawyers Nicolas Tang and Jolene Gwee from Farallon Law Corporation argued for him to be jailed for 16 to 24 weeks.

The police said on Oct 29 that Oh’s conviction was the result of a joint investigation carried out by the Commercial Affairs Department (CAD) of the Singapore Police Force and the Monetary Authority of Singapore (MAS), following a referral from the Singapore Exchange Regulation.

In March 2017, former DBS Vickers trader Dennis Tey Thean Yang was sentenced to 16 weeks in prison for spoofing the securities market and making a profit of $30,239 from his illicit trades.

It was the “first conviction of market misconduct under the joint investigation arrangement with the CAD”, MAS said in a statement then after Tey’s sentencing.

The second case occurred in July 2021 when former account manager Ee Cho Lian was sentenced to six weeks’ jail and fined $30,000 for 107 false orders and 60 spoof trades where he made a profit of $24,196.

Oh’s conviction and sentencing is the third such reported case, and his illegal $255,385 profit is the largest amount so far.

He has since made full restitution to IG Asia.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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