Four former employees of Phillip Securities who defrauded the brokerage by exploiting a loophole in internal systems escaped jail for their scam last week.
The High Court said that even though a prison sentence would normally be warranted for such serious offences, it would be unfair to jail them when the mastermind got only a fine for his role.
The four - Ng Sae Kiat, Oh Chao Qun, Wong Siaw Seng and Joseph Tan Kian Ming - were fined between $60,000 and $140,000 in June last year after they pleaded guilty to charges under the Securities and Futures Act.
Prosecutors appealed for the four to be jailed, arguing that punishing insiders with mere fines "sets the wrong tone" for securities offences and can damage Singapore's reputation as a leading financial centre if left unchecked.
Prosecutors did not seek jail for the brains behind the fraud, Vincent Tan Wei Ren, who was fined $26,000, as he stopped trading at an early stage on his own volition.
Lawyer Hamidul Haq, acting for the four, argued that Vincent Tan stopped only because he was transferred out of the team.
The five had defrauded Phillip Securities by accepting contracts for differences (CFD) trades at prices disadvantageous to their employer. CFDs are instruments in which an investor transacts with the brokerage and invests in the price movements of securities without owning the securities.
Vincent Tan alerted the others to a loophole that allowed hedgers to manually accept trades even if they were not at market prices.
The five initiated trades from accounts of friends and relatives and routed the trades to one another for approval. They were caught after a tip-off from a whistle-blower.