Bursa Malaysia Securities Berhad (Bursa Securities) has publicly reprimanded, imposed a fine of RM10,000 and suspended Peer Mohd Bin Abdul Aleez (Peer) for three months as a Registered Person, including from trading on or through the stock market of Bursa Malaysia as a Dealer’s Representative (DR), for engaging in false trading activities involving the securities of Excel Force MSC Bhd (EFORCE) and LNG Resources Bhd (LNG) in his two clients’ accounts. Peer is also required to undergo training on the conduct or professionalism of DRs and market offences.
Peer, who was at the material time of the breach a Commissioned DR of Inter-Pacific Securities Sdn Bhd at its Johor Bahru branch, contravened and/or triggered the provisions of Rules 401.1(3), 404.3(1)(a) & (c) and 1302.1(1)(g) of the Rules of Bursa Securities.
Bursa Securities places a strong emphasis on the need to maintain a fair and orderly market. Bursa Securities will not tolerate any acts or practices which could lead to false trading or manipulative activities. Registered Persons or DRs are reminded to act with integrity in maintaining market confidence and upholding the interest of the investing public and the market. Bursa Securities will not hesitate to take appropriate actions against anyone who engages in such misconducts, including suspending or striking off a Registered Person from the Register or imposing a fine commensurate with the severity of the breach.
BACKGROUND
The finding of the breach and the imposition of the sanctions on Peer 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 the impact of the trades undertaken, the conduct of Peer and the following:-
- Peer had executed trades in the securities of EFORCE and LNG in his two clients’ accounts which did not involve any change in the beneficial ownership (NCBO Trades). It was noted that in all the NCBO Trades undertaken by Peer, he had first entered sell orders in his clients’ accounts. Within a short span of time (the majority of which were less than a minute), he had entered the corresponding buy orders for the same clients’ accounts to buy from the sell orders entered by him earlier, resulting in the matching of his buy and sell orders.
- Peer had executed the NCBO Trades in his clients’ accounts to rollover the trades to the next trading cycle to prolong the holding period. It was noted that in some instances, he had executed NCBO Trades to rollover all overdue trades to the next trading cycle, which were repeated in the clients’ accounts for several months.
- Although the NCBO Trades undertaken were not significant vis-a-vis the overall market impact and/or price impact, Peer’s actions in executing these NCBO Trades had the effect of maintaining or raising the prevailing market price of the two counters. His actions gave rise to the false or misleading appearance of the securities, and did not reflect the fair and orderly dealing activities which are expected of a responsible Registered Person.
- As a DR, Peer must, amongst others:
- observe professional standards of integrity and fair dealing including exercising due care and diligence in the execution of trades;
- carry out his duties efficiently and in a manner which contributes to the maintenance of a fair and orderly market; and
- avoid/refrain from engaging or becoming a party to, or getting involved in, the false/misleading appearance with respect to the securities.
ADDENDUM
Rules 401.1(3), 404.3(1)(a) & (c) and Rule 1302.1(1)(g) of the Rules of Bursa Securities (the Rules) state, amongst others, that:-
- DRs shall avoid any act or practice which might lead to a false or misleading appearance of active trading in any securities on the stock market of the Exchange or a false or misleading appearance with respect to the market for, or the price of, any such securities or directly or indirectly be tantamount to stock market manipulations.
- DRs shall at all times observe professional standards of integrity and fair dealing and conduct their business in a manner which contributes to the maintenance of a fair and orderly market; and
- any Participant who, in any circumstances, directly or indirectly fails to perform his duties efficiently, honestly or fairly shall be liable and be dealt with in accordance with the provisions of the Rules relating to the same.