A former trader at DBS Group Holdings' brokerage unit yesterday was convicted by a Singapore court for spoofing the securities market in the city's first such criminal case.
Dennis Tey Thean Yang, 33, pleaded guilty to eight of the 23 charges he faced, including his attempts to artificially move prices through fraudulent securities orders and misusing other people's trading accounts without consent.
Tey was a broker at DBS Vickers Securities (Singapore) when he committed the offences over four months in late 2012 and early 2013. He made a profit of $30,239.
Regulators and exchanges are stepping up scrutiny of market misconduct and Tey's case is the first by the Monetary Authority of Singapore and the white-collar crime police since they banded together in 2015 to probe offences.
Singapore Exchange (SGX) last month said it would focus on cases that threaten market integrity after punishing traders for false trading.
Deputy Public Prosecutor Kwek Chin Yong called Tey's scheme sophisticated, saying it was one that was not easy to pull off. The prosecution sought a jail term of six months. "We can't encourage this sort of behaviour to continue gaming the system," he said.
According to court papers, Tey tried to manipulate prices of contracts for differences (CFDs), where investors can profit from the price fluctuations of underlying assets without actually owning them.
After purchasing the CFDs, he would make fake orders in the underlying securities, which he would then delete. The trades had little or no market impact and Tey's orders were ultimately not filled, his lawyer Adrian Wee said.
Tey stopped trading when he realised it might be unlawful, the lawyer added. "This was one guy, in a room, in front of his computer," Mr Wee said, adding that Tey's actions were not as sophisticated as what the prosecution had made it out to be.
Tey, a Malaysian national, left DBS Vickers in March 2014 and was arrested in May 2015. He will be sentenced on March 22.