KUALA LUMPUR: Bursa Malaysia Securities Bhd publicly reprimanded and fined Macquarie Capital Securities (Malaysia) Sdn Bhd RM50,000 over offences relating to inflating trades in several securities over eight months.
It had on Thursday, Aug 18 also rapped the company's former heads of dealing, Thomas Chin Yun Phin and Hilton Lee RM25,000 and RM10,000 respectively.
Bursa Securities also ordered that Chin be struck off from the Register, if he was still a Registered Person of Bursa Securities.
The exchange has also ordered restrictions on Lee from carrying out activities as a Registered Person, including trading on or through the stock market of Bursa Malaysia, for 18 months from Nov 23, 2010.
It said the finding of the breach and imposition of the sanctions on Macquarie, Chin and Lee were made following completion of the due process and after considering all facts and circumstances, including those arising from the investigations carried out.
'The breach is in relation to dealing activities undertaken at Macquarie in several securities over a period of eight months, which resulted in inflated volumes of trades for the relevant securities in excess of clients' orders (inflated trades).
'These Inflated Trades also had features of trades with no change in the beneficial ownership (NCBO Trades) as well as shortselling/intra-day shortselling as the client(s) had only made available certain quantities of securities as tradeable balance, resulting in the execution of the remaining sale transactions without the requisite tradeable balance,' it said.
The exchange said it viewed all breaches involving act(s)/practice(s) tantamount to manipulative/abusive trading seriously.
'It was found that there was a lack/lapses of supervision in the dealing activities of Macquarie following a series of incidences of inflated trades which took place for at least eight months prior to the discovery of the same by Macquarie.
In addition, Macquarie failed to ensure the accuracy of information provided to Bursa Securities by not undertaking an independent verification of the details provided to Bursa Securities and had merely relied on representations made by its heads of dealing who were the very persons involved in the concerned trades,' it said.
It had on Thursday, Aug 18 also rapped the company's former heads of dealing, Thomas Chin Yun Phin and Hilton Lee RM25,000 and RM10,000 respectively.
Bursa Securities also ordered that Chin be struck off from the Register, if he was still a Registered Person of Bursa Securities.
The exchange has also ordered restrictions on Lee from carrying out activities as a Registered Person, including trading on or through the stock market of Bursa Malaysia, for 18 months from Nov 23, 2010.
It said the finding of the breach and imposition of the sanctions on Macquarie, Chin and Lee were made following completion of the due process and after considering all facts and circumstances, including those arising from the investigations carried out.
'The breach is in relation to dealing activities undertaken at Macquarie in several securities over a period of eight months, which resulted in inflated volumes of trades for the relevant securities in excess of clients' orders (inflated trades).
'These Inflated Trades also had features of trades with no change in the beneficial ownership (NCBO Trades) as well as shortselling/intra-day shortselling as the client(s) had only made available certain quantities of securities as tradeable balance, resulting in the execution of the remaining sale transactions without the requisite tradeable balance,' it said.
The exchange said it viewed all breaches involving act(s)/practice(s) tantamount to manipulative/abusive trading seriously.
'It was found that there was a lack/lapses of supervision in the dealing activities of Macquarie following a series of incidences of inflated trades which took place for at least eight months prior to the discovery of the same by Macquarie.
In addition, Macquarie failed to ensure the accuracy of information provided to Bursa Securities by not undertaking an independent verification of the details provided to Bursa Securities and had merely relied on representations made by its heads of dealing who were the very persons involved in the concerned trades,' it said.
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