31-05-2011, 06:25 AM
Naughty boy! Some people are really desperate to make money, the illegal way!
May 31, 2011
Trader admits to stock market manipulation
He used real-time data to turn quick profit from buying, selling warrants
By Khushwant Singh, Court Reporter
A TRADER pleaded guilty yesterday to manipulating the stock market.
Sim Tee Yang had access to real-time data, including bids and asking prices, through his job with CIMB-GK Securities.
He used this information to quickly sell large quantities of a certain share. This pushed down the price of warrants, which are financial products linked to shares.
Sim snapped up the warrants at the lower price. He then pushed their value back up by buying shares, and sold the warrants for a profit.
The 44-year-old worked as a proprietary trader for the securities firm, a district court heard. This means he was trading with the company's money as opposed to customers'.
Profits would be shared equally between him and his employer.
In 2005, Sim started buying shares in CapitaMall Trust, which was traded on the Singapore stock exchange. The price of these shares was closely linked to the price of CapitaMall warrants.
According to one of the charges, he sold 37,000 shares in 47 seconds. This caused the price of the warrants to dip by three cents.
Seconds later, he bought 180,000 CapitaMall warrants.
Sim waited two minutes, then started buying CapitaMall Trust shares, driving the price up from $2.34 to $2.38, and increasing the price of the warrant from 53 cents to 55.5 cents.
He then repeated this trick. By the end of the day, he had made a profit of $3,840.
Sim used the trick again on 11 other days.
Between May and August 2005, his profit was $16,511.
The court heard that CapitaMall Trust had been listed and traded on the Singapore stock exchange since 2002.
When the offences were committed, its portfolio consisted of shopping malls such as Tampines Mall, Junction 8 Shopping Centre and Funan DigitaLife Mall.
The CapitaMall warrants were issued by Calyon Financial Products.
Its Hong Kong office would issue the market quotes for these warrants to brokerage firm CLSA Singapore.
CLSA would then transmit these quotes to the Singapore stock exchange trading platform.
Sim had access to this real-time data, and used it to help him commit his crimes.
The trader pleaded guilty to four counts of market manipulation.
Eight charges will be taken into consideration when he is sentenced on June 21.
Deputy Public Prosecutor James Lee told the court that on the days when Sim manipulated the market, he was responsible for between 97 per cent and 100 per cent of the trades in CapitaMall warrants.
Defence counsel Andy Yeo said he would need three weeks to prepare the mitigation because of the complicated nature of the case.
Sim, who wore a business suit in court, is out on bail of $100,000. He can be fined up to $250,000, jailed for up to seven years, or both.
khush@sph.com.sg
May 31, 2011
Trader admits to stock market manipulation
He used real-time data to turn quick profit from buying, selling warrants
By Khushwant Singh, Court Reporter
A TRADER pleaded guilty yesterday to manipulating the stock market.
Sim Tee Yang had access to real-time data, including bids and asking prices, through his job with CIMB-GK Securities.
He used this information to quickly sell large quantities of a certain share. This pushed down the price of warrants, which are financial products linked to shares.
Sim snapped up the warrants at the lower price. He then pushed their value back up by buying shares, and sold the warrants for a profit.
The 44-year-old worked as a proprietary trader for the securities firm, a district court heard. This means he was trading with the company's money as opposed to customers'.
Profits would be shared equally between him and his employer.
In 2005, Sim started buying shares in CapitaMall Trust, which was traded on the Singapore stock exchange. The price of these shares was closely linked to the price of CapitaMall warrants.
According to one of the charges, he sold 37,000 shares in 47 seconds. This caused the price of the warrants to dip by three cents.
Seconds later, he bought 180,000 CapitaMall warrants.
Sim waited two minutes, then started buying CapitaMall Trust shares, driving the price up from $2.34 to $2.38, and increasing the price of the warrant from 53 cents to 55.5 cents.
He then repeated this trick. By the end of the day, he had made a profit of $3,840.
Sim used the trick again on 11 other days.
Between May and August 2005, his profit was $16,511.
The court heard that CapitaMall Trust had been listed and traded on the Singapore stock exchange since 2002.
When the offences were committed, its portfolio consisted of shopping malls such as Tampines Mall, Junction 8 Shopping Centre and Funan DigitaLife Mall.
The CapitaMall warrants were issued by Calyon Financial Products.
Its Hong Kong office would issue the market quotes for these warrants to brokerage firm CLSA Singapore.
CLSA would then transmit these quotes to the Singapore stock exchange trading platform.
Sim had access to this real-time data, and used it to help him commit his crimes.
The trader pleaded guilty to four counts of market manipulation.
Eight charges will be taken into consideration when he is sentenced on June 21.
Deputy Public Prosecutor James Lee told the court that on the days when Sim manipulated the market, he was responsible for between 97 per cent and 100 per cent of the trades in CapitaMall warrants.
Defence counsel Andy Yeo said he would need three weeks to prepare the mitigation because of the complicated nature of the case.
Sim, who wore a business suit in court, is out on bail of $100,000. He can be fined up to $250,000, jailed for up to seven years, or both.
khush@sph.com.sg
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