$8b penny stock crash trial

Remisier admits exploiting clients' trading instructions

Remisier Ng Kit Kiat's testimony shed light on how brokers could exploit information from clients.
Remisier Ng Kit Kiat's testimony shed light on how brokers could exploit information from clients.ST PHOTO: WONG KWAI CHOW

Testimony from an OCBC Securities remisier under cross-examination in the penny stock crash trial yesterday threw light on how brokers could exploit information from clients.

Remisier Ng Kit Kiat admitted that he indulged in what is called front-running when given instructions from one of the accused in the trial.

Front-running involves a broker taking an order from a client but lodging the trade on his own first, before the client's order is placed.

This could result in the initial trade benefiting from a price rise triggered by the second.

Mr Ng, a prosecution witness, had told the court earlier that he took instructions from defendants John Soh Chee Wen and Quah Su-Ling on trades of Blumont Group, Asiasons Capital (now Attilan Group) and LionGold Corp.

The pair are facing multiple counts of market manipulation and deception.

Under cross-examination yesterday from Quah's counsel Philip Fong of Eversheds Harry Elias, Mr Ng also conceded that he had placed trades for his wife after he received instructions from Quah but before executing the orders Quah had requested.

Mr Ng had initially denied front-running but Mr Fong cited two instances in 2013 in which the remisier had placed orders through his wife's account ahead of similar orders for other accounts that the prosecution said were improperly controlled by Soh and Quah.

Mr Ng testified that Quah would sometimes instruct him to hold back trade orders for a while, which explained why her trade was not keyed in immediately.

But Mr Fong pressed him: "But the whole point is after Quah Su-Ling had given you instructions, you keyed in your wife's order first."

Mr Ng said: "Looks like."

Mr Fong: "Do you agree you were front-running in this case?"

Mr Ng: "Yes."

He also acknowledged that brokers share market information with one another as well as with clients - actions that could push up the price of a counter.

Mr Ng is the first prosecution's witness to take the stand in the trial, which is a culmination of investigations into the circumstances that led to the the October 2013 collapse in the shares of Blumont, Asiasons and LionGold.

Prosecutors allege that Soh and Quah controlled a web of 189 accounts to manipulate the market for the three counters and used intermediaries and brokers like Mr Ng to operate the scheme.

A third defendant, Goh Hin Calm, has already pleaded guilty to aiding and abetting the alleged scheme as a bookkeeper for Soh and Quah.

A version of this article appeared in the print edition of The Straits Times on March 30, 2019, with the headline 'Remisier admits exploiting clients' trading instructions'. Subscribe