PP v Ng Sae Kiat: Securities Fraud & CFD Manipulation Appeal

The Public Prosecutor appealed against the sentences imposed on Ng Sae Kiat, Tan Kian Ming Joseph, Oh Chao Qun, and Wong Siaw Seng by the District Judge for charges under s 201(b) read with s 204(1) of the Securities and Futures Act. The Respondents, former CFD Hedgers at Phillip Securities Pte Ltd, defrauded PSPL by accepting "out of market" CFD trades. The High Court dismissed the Prosecution's appeals, citing the parity principle, as Vincent Tan, the mastermind behind the fraud, received only a fine.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

The Prosecution’s appeals against the sentences imposed on the Respondents were dismissed.

1.3 Case Type

Criminal

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal by Public Prosecutor against sentences for Ng Sae Kiat, Tan Kian Ming Joseph, Oh Chao Qun, and Wong Siaw Seng for securities fraud involving CFD manipulation.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Public ProsecutorAppellantGovernment AgencyAppeal DismissedLost
Lynn Tan of Attorney-General’s Chambers
Loh Hui-min of Attorney-General’s Chambers
Gillian Koh Tan of Attorney-General’s Chambers
Ng Sae KiatRespondentIndividualAppeal DismissedWon
Oh Chao QunRespondentIndividualAppeal DismissedWon
Wong Siaw SengRespondentIndividualAppeal DismissedWon
Tan Kian Ming, JosephRespondentIndividualAppeal DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Chao Hick TinJustice of the Court of AppealYes
See Kee OonJudicial CommissionerNo

4. Counsels

Counsel NameOrganization
Lynn TanAttorney-General’s Chambers
Loh Hui-minAttorney-General’s Chambers
Gillian Koh TanAttorney-General’s Chambers
Hamidul HaqRajah & Tann Singapore LLP
Thong Chee KunRajah & Tann Singapore LLP
Josephine CheeRajah & Tann Singapore LLP
Istyana IbrahimRajah & Tann Singapore LLP

4. Facts

  1. Respondents were CFD Hedgers at Phillip Securities Pte Ltd (PSPL).
  2. Respondents defrauded PSPL by accepting "out of market" CFD trades.
  3. Trades were initiated using nominee CFD accounts belonging to friends and relatives.
  4. Vincent Tan alerted the Respondents to a "loophole" in PSPL’s CFD system.
  5. PSPL prohibits employees from opening personal CFD trading accounts.
  6. Respondents abused their discretion to accept or reject CFD trades on behalf of PSPL.
  7. PSPL did not have a system for monitoring the manual acceptance of CFD trades.

5. Formal Citations

  1. Public Prosecutor v Ng Sae Kiat and other appeals, Magistrate's Appeals Nos 131-134 of 2014/01, [2015] SGHC 191

6. Timeline

DateEvent
Oh, Tan and Wong learned about the loophole in PSPL’s CFD system from Vincent Tan.
Tan approached his friend, Chee Seng You Paul, to open CFD account No 463003.
Wong approached his friend, Huang Guorong, to open CFD account No 442135.
Oh approached his friend, Tan Chee How, to open CFD account No 399743.
Ng used CFD account No 467620 to conduct personal CFD trades.
Oh, Tan and Wong agreed with Vincent Tan’s proposal to use CFD account No 457121.
Oh used CFD account No 399743 to exploit the loophole in PSPL’s CFD system.
Wong and Tan collaborated to conduct “out of market” trades using CFD account No 463003.
Oh approached his friend, Yang Zhi Rong Kevin, to open CFD account No 475136.
Oh, Tan and Wong ceased using CFD account No 457121.
Wong approached Tan to collaborate with him to conduct “out of market” trades using CFD account No 442135.
Vincent Tan voluntarily ceased his offending conduct.
Oh switched from being a CFD Hedger to become proprietary trader in PSPL.
Tan was solely responsible for accepting “out of market” trades.
Ng used CFD account No 467620 to exploit the “loophole” to his benefit.
Investigations commenced.
Oh proposed that CFD account No 399743 be used to exploit the “loophole” in PSPL’s CFD system.
Oh joined Wong and Tan in CFD account No 463003.
Oh, Wong and Tan collaborated to conduct “out of market” trades using CFD account No 475136.
Wong approached his friend, Ho Hong, to open CFD account No 479711.
Wong and Tan collaborated to conduct “out of market” trades using CFD account No 479711.
Ng used CFD account No 467620 to exploit the “loophole” to his benefit.
Fraudulent activity ceased.
Respondents were charged.
Vincent Tan pleaded guilty to three charges under s 201(b).
Respondents pleaded guilty to charges under s 201(b) read with s 204(1) of the Securities and Futures Act.
Respondents were sentenced.
Judgment reserved.

7. Legal Issues

  1. Breach of Securities and Futures Act
    • Outcome: The court upheld the original sentences, finding no reason to overturn the District Judge's decision.
    • Category: Substantive
    • Sub-Issues:
      • Fraudulent Trading
      • Market Misconduct
      • Abuse of Discretion
  2. Parity in Sentencing
    • Outcome: The court applied the parity principle, finding that the Respondents should be treated similarly to Vincent Tan, the mastermind, who received a fine.
    • Category: Procedural
    • Sub-Issues:
      • Unequal Treatment of Co-Offenders
      • Disproportionate Sentencing
    • Related Cases:
      • [1998] 3 SLR(R) 95
      • [2015] SGHC 183
      • Green v R (2011) 283 ALR 1
      • Jimmy v R (2010) 269 ALR 115

8. Remedies Sought

  1. Custodial Sentences

9. Cause of Actions

  • Breach of Statutory Duty
  • Fraud

10. Practice Areas

  • Commercial Litigation
  • Criminal Litigation
  • Securities Fraud
  • Financial Regulation

11. Industries

  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Chan Kum Hong Randy v Public ProsecutorHigh CourtYes[2008] 2 SLR(R) 1019SingaporeCited to suggest that an inordinate delay in prosecution is a factor which the court can take into account in giving a “discount” in sentence.
Ng Geok Eng v Public ProsecutorHigh CourtYes[2007] 1 SLR (R) 913SingaporeCited for the distinction between unauthorised share trading which defrauds innocent investors and that which defrauds professional securities firms.
Public Prosecutor v Chui Siew PunDistrict CourtYes[2009] SGDC 293SingaporeCited for applying the distinction drawn in Ng Geok Eng and deciding that a custodial sentence would not be appropriate.
Public Prosecutor v Fan Ying Kit & anorDistrict CourtYes[2011] SGDC 126SingaporeCited for applying the distinction drawn in Ng Geok Eng and holding that the unauthorised share trading aspect of the offenders’ criminal conduct was “not remarkable” and imposed non-custodial sentences in respect of those offences.
Public Prosecutor v Loo Kiah Heng & anorDistrict CourtYes[2010] SGDC 434SingaporeCited for rejecting the argument that the offence fell within the category of cases involving unauthorised share trading with the consent of the account holder.
Public Prosecutor v Wang Ziyi AbleHigh CourtYes[2008] 2 SLR(R) 1082SingaporeCited to make clear that fines are often ineffective to achieve “meaningful deterrence” in the context of white-collar crimes.
Public Prosecutor v Cheong Hock Lai and Other AppealsHigh CourtYes[2004] 3 SLR 203SingaporeCited for describing s 201(b) and its predecessor, s 102(b) of the SIA, as “catch-all” provisions.
Public Prosecutor v Fernando Payagala Waduge Malitha KumarHigh CourtYes[2007] 2 SLR(R) 334SingaporeCited to establish that the fact that no or minimal loss actually accrues as a result of external intervention is a relevant but not decisive factor in assessing the appropriate sentence.
Public Prosecutor v Law Aik MengHigh CourtYes[2007] 2 SLR(R) 814SingaporeCited for the difficulty of detecting commercial crimes has been held to be a factor which justifies imposing a heavy sentence when such crimes are uncovered and prosecuted.
Sim Gek Yong v PPUnknownYes[1995] 1 SLR(R) 185SingaporeCited for the principle that once an accused has pleaded guilty, the court should not consider the possibility that “an alternative – and graver – charge might have been brought and treat him as though he had been found guilty of the graver charge”.
Public Prosecutor v RamleeUnknownYes[1998] 3 SLR(R) 95SingaporeCited for the pronouncement on the scope and effect of the parity principle as it applies in Singapore.
Lim Bee Ngan Karen v Public ProsecutorHigh CourtYes[2015] SGHC 183SingaporeCited for discussing the scope of the parity principle more extensively.
Green v RHigh Court of AustraliaYesGreen v R (2011) 283 ALR 1AustraliaCited for explaining the scope of the parity principle.
Jimmy v RNew South Wales Court of Criminal AppealYesJimmy v R (2010) 269 ALR 115AustraliaCited for holding that the parity principle would apply as between participants in a “common criminal enterprise” who might have committed different crimes.
Public Prosecutor v UIUnknownYes[2008] 4 SLR(R) 500SingaporeCited for the principle that this court has the discretion to enhance a sentence which it considers manifestly inadequate.
Yong Siew Soon and another v Public ProsecutorUnknownYes[1992] 2 SLR(R) 261SingaporeCited for the principle that parity and consistency in sentencing are desirable goals, they are not necessarily overriding considerations.
Meeran bin Mydin v Public ProsecutorUnknownYes[1998] 1 SLR(R) 522SingaporeCited for the principle that parity and consistency in sentencing are desirable goals, they are not necessarily overriding considerations.
Dinesh Singh Bhatia s/o Amarjeet Singh v Public ProsecutorUnknownYes[2005] 3 SLR 1SingaporeCited for the principle that ultimately, the circumstances of each case are of paramount importance in determining the appropriate sentence.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Securities and Futures Act (Cap 289, 2006 Rev Ed) s 201(b)Singapore
Securities and Futures Act (Cap 289, 2006 Rev Ed) s 204(1)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Contracts for Differences (CFD)
  • CFD Hedgers
  • Out of Market Trades
  • Nominee Accounts
  • Market Making Profit
  • Parity Principle
  • Securities and Futures Act (SFA)
  • Phillip Securities Pte Ltd (PSPL)
  • Loophole
  • Common Criminal Enterprise

15.2 Keywords

  • securities fraud
  • CFD manipulation
  • market misconduct
  • insider trading
  • financial crime
  • securities and futures act
  • parity principle
  • sentencing
  • criminal law
  • financial regulation

17. Areas of Law

Area NameRelevance Score
Fraud and Deceit95
Securities and Futures Act90
Securities Fraud90
Securities Law90
Financial Crime90
Company Law40
Criminal Law20
Financial Services Law20
Contract Law20
Banking and Finance20
Banking Law20
Commercial Law20
Commercial Litigation20
Corporate Law20
Corporate Litigation20
Legal Ethics10
Professional Ethics10
Civil Procedure10
Insurance Law10

16. Subjects

  • Securities Regulation
  • Financial Crime
  • Sentencing Principles