Jail for director of commercial market maker in price and market rigging conspiracies

CNA

a day ago

SINGAPORE: A man who was involved in four conspiracies to rig the market or price for share or unit counters listed on the Singapore Exchange (SGX) was sentenced on Friday (Aug 15) to jail for two years, three months and two weeks.
Huang Yiwen, a 42-year-old Singaporean, had pleaded guilty last month to 24 charges under the Securities and Futures Act, with another 88 charges taken into consideration for sentencing.
Of the four conspiracies he was involved in, one of them allegedly involves New Silkroutes Group's then-chief executive Goh Jin Hian, the son of former prime minister Goh Chok Tong.
Through Huang's involvement, his company GTC Group earned S$3.48 million (US$2.72 million) in fees from the market-making services.
Huang, also known as Leo, was the sole director, shareholder and operator of GTC Group and holds a Masters in Finance from the University of New York.
The role of a market maker is to continuously provide both bid and ask quotes for a given security, helping to provide liquidity and reduce volatility in the security.
In return, the market maker earns a profit from the bid-ask spread, which is the difference between the market maker's buying and selling price, and may also receive a commission from the issuer of the security.
While SGX allows companies to engage market makers to provide liquidity in the market, a market maker is not allowed to do anything to create a false or misleading appearance of active trading.
However, when the officers of three listed companies that engaged him asked him to rig the prices of their securities, he did so.
Using his expertise, he created a false impression in the prices of the securities.
Among other methods, he used the technique of "marking the close", by purchasing small amounts of shares at the close of each trading day, in order to push up the price and secure a favourable closing price for the day.
To create a favourable impression of his performance as a market maker and in hopes of attracting genuine market participants to trade, Huang roped in two licensed representatives to cross-trade shares with him to create a false trading volume in five listed entities, without any genuine change in beneficial ownership.
The prosecution said he was the mastermind of this conspiracy, giving directions to the two licensed representatives and promising them a profit for their involvement.
The four conspiracies involve three schemes for three companies: New Silkroutes Group and Tee International Limited, both companies listed on the SGX, and AGV Group Limited, a company listed on the Catalist board of SGX.
The fourth conspiracy is a cross-trade scheme involving two other two men approached by Huang: Tay Sze Chien, a 41-year-old trading representative with Philip Securities, and Tan Wei Liang, a 46-year-old trading representative with Maybank Kim Eng Securities.
The prosecution had said that Huang abused his position as a commercial market maker and was motivated by the "significant personal gain he stood to make", as GTC earned more than S$3 million in fees from the companies over the entire period.
His defence lawyers, Mr Michael Palmer and Ms Joyce Khoo from Quahe Woo & Palmer, asked for "one chance" for Huang in seeking 17 months' jail instead.
The lawyers said this was a lapse of judgment on his part, and that Huang regrets his actions and did not gain any personal benefit from the offences. In fact, he had to borrow money to make up for the losses he suffered in using his own money to trade.
They added Huang was the sole breadwinner for his family before the offences, but has been unemployed since investigations started in early 2020, resulting in financial difficulties for his family. He has four children.
The judge allowed Huang to defer his jail term to December.