Bursa Malaysia Kicks Out Broker For Putting Trades in Wife’s Account
Bursa Malaysia Securities Berhad (Bursa Securities) publicly reprimanded, imposed a fine of RM50,000 and ordered to strike off Yap Boh Hian (Yap) from the Register as a Dealer’s Representative (DR) for engaging in unlawful/unethical trading activities/practices through non-permissible contract amendments (the breach). In this regard, Yap had transferred numerous profitable trades from his other clients’ accounts to his wife’s accounts through non-permissible contract amendments carried out by him.
Yap, at the material time of the breach, triggered the provisions of Rules 1302.1(1)(i)(iii) & 1302.1(1)(g) and breached Rules 601.2(4)(a), 404.3(1)(a)&(b), 401.1(1)(f), 401.1(2) and/or 404.3(10)(a) of the Rules of Bursa Securities.
The finding of the breach and the imposition of the aforementioned sanctions on Yap were made pursuant to Rule 1301.2 of the Rules of Bursa Securities upon completion of due process and after taking into consideration all facts and circumstances, including that:-
1. Yap had carried out amendments to numerous purchase and sale contracts in his clients’ accounts (“1st named clients”) which had day trade gains so that these gains were thereafter transferred to his wife’s account. Through the process of abusing the contract amendment facility in the trading system, Yap had unlawfully transferred/amended profitable trades in the 1st named clients’ accounts to his wife’s account resulting in illegal/unlawful gains in his wife’s account to the disadvantage of the 1st named clients.
2. Yap had carried out frequent and numerous contract amendments which resulted in a change of the original party to the contract, most of which involved the same clients/common clients thus indicating that the contract amendments carried out were not due to execution error.
3. As a DR, Yap must:-
1. ensure that the trades of the intended clients remain in the intended clients’ accounts or the clients’ trades were only executed in the accounts of clients who had given the orders or for whom the transactions were to be carried out;
2. perform his duties as a DR efficiently and honestly; and
3. refrain from engaging in the unlawful practice/be a party to the unethical practice/observe professional standards of integrity and fair dealing/act in the best interest of his clients.
Premised on these facts, Yap had failed to discharge his duties as a Registered Person.
Bursa Securities views all breaches involving unethical/unlawful trading activities/practices seriously and does not tolerate such breaches. Bursa Securities believes that the integrity of DRs in upholding the interest of clients and the investing public is a matter of utmost importance and any misconduct which impinges on the integrity of the DRs will not be tolerated. Bursa Securities strongly detests/abhors all abuses of the trading facility, including the contract amendment facility, which leads/may lead to market offences. Bursa Securities will not hesitate to take the appropriate action against anyone who engages in such conducts, including striking off a Registered Person from the Register, or to impose a substantial fine commensurate with the severity of the breach.