MAS records highest civil penalties for financial crimes in latest enforcement report

The regulator said it had imposed $12.96 million in civil penalties for market abuse cases. ST PHOTO: SHINTARO TAY

SINGAPORE – The Monetary Authority of Singapore (MAS) imposed the highest amount in civil penalties for financial crimes from January 2022 to June 2023, compared with previous 18-month periods.

In its fourth enforcement report issued on Tuesday, the regulator said it had imposed nearly $13 million in civil penalties for market abuse cases – the largest amount recorded so far. The civil penalties were handed out for false trading, insider trading and disclosure-related breaches.

A total of almost $7.9 million in composition penalties were handed out in the 18 months, including $7.1 million for anti-money laundering breaches.

Among the high-profile actions taken by the regulator during the period was the $3.8 million fine on three banks and an insurer for their dealings with people linked to the global Wirecard scandal.

In late June, MAS said DBS Bank, OCBC Bank, Citibank Singapore and insurer Swiss Life Singapore were fined for breaching anti-money laundering and anti-terrorism financing rules relating to the case.

In August 2022, Noble Group was handed a $12.6 million fine for publishing misleading information in its financial statements, the regulator said.

On Sept 14, MAS said it had imposed a nine-year ban on each of the two co-founders of crypto hedge fund Three Arrows Capital, which collapsed in June 2022.

Mr Zhu Su and Mr Kyle Livingston Davies, both aged 36, were issued prohibition orders for providing false information to MAS and breaching business control requirements.

The two men are banned by the Singapore regulator from taking part in the management, acting as a director, or becoming a substantial shareholder of any regulated capital market services company in Singapore. They also cannot perform any regulated activity under the Securities and Futures Act.

Between January 2022 and June 2023, MAS issued 18 prohibition orders against unfit financial representatives. Of these, 12 individuals were banned from the financial industry for one to five years, five people were banned for six to 10 years, while one person was banned from re-entering the industry for more than 10 years.

As a result of joint investigations with the Singapore Police Force’s Commercial Affairs Department (CAD), 39 people were convicted of market misconduct and related offences, MAS said.

Previous reports focused on MAS-led investigations, so the number of convictions was lower.

In all, 455 actions were taken, including reprimands, warnings and supervisory reminders.

Ms Peggy Pao, MAS’ executive director for enforcement, said MAS has been tackling increasingly complex and large-scale cases.

“Such cases involve multifaceted and cross-border misconduct, requiring intensive collaboration with both local and overseas enforcement partners; voluminous digital evidence; as well as novel financial services and products,” she said.

Ms Pao added that over the years, MAS has also secured an increasing number of criminal convictions in market misconduct cases. “The number is even larger in this reporting period, taking into account all cases under the MAS-CAD joint investigations arrangement.”

Of the 136 cases opened during the 18 months, insider trading made up most of the cases at 32, followed by 25 linked to disclosure-related breaches such as false information, among others.

In its outlook, MAS said it would enhance capacities to tackle misconduct in Singapore’s digital asset ecosystem, which is still evolving, even as it continues to keep tabs on asset and wealth managers.

Following the bankruptcies of prominent crypto-related firms in 2022, MAS is now in the midst of putting in place rules for the sector, including those addressing consumer safeguards and unfair trading practices.

The regulator will increasingly look at whether crypto firms licensed here are compliant with?licence requirements and regulations.

On the asset and wealth management front, the regulator said it would “step up supervisory engagements to focus on serious regulatory breaches such as those involving dishonesty, gross conflict of interest and poor risk management”.

In 2016, MAS established a dedicated department to consolidate its enforcement functions across the banking, insurance, capital markets and other regulated sectors.

The report is part of a broader effort to provide greater transparency on the regulator’s enforcement outcomes and strategies.

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