You are here

3 Singaporeans jailed for 'front-running' in landmark insider trading case

THREE men who ran an illegal share trading scheme that netted them more than S$2 million each have been jailed for terms ranging from 20 months to three years.

The men - Leong Chee Wai, Toh Chew Leong and Simon E Seck Peng - pleaded guilty to more than 100 charges involving a process called "front-running".

This occurs when a broker uses advance information of pending share orders to then place buy or sell trades through his personal account with the aim of benefiting once the stock price moves.

This is the first front-running case prosecuted as an insider trading offence, which attracts a heavier punishment, in part due to the involvement of price sensitive information.

The case centred on offences committed between 2007 and 2014 involving around 40 Singapore-listed companies, including Ascendas Real Estate Investment Trust, CapitaMalls Asia and Global Logistic Properties. Foreign-listed stocks were targeted as well.

Your feedback is important to us

Tell us what you think. Email us at

Leong, 50, was a senior equity dealer in First State Investments Singapore (FSIS) in March 2007 when he entered into an agreement with E, 50, to profit from confidential information he had about orders that FSIS intended to make.

His job included executing trading orders placed by FSIS's portfolio managers.

E would use his personal trading account with UOB Kay Hian to place orders, usually ahead of the FSIS trades being lodged.

Once the share price started to rise in the wake of the usually sizeable FSIS trades, E would offload his stock to reap a profit.

The money was then split equally between the pair.

Toh, 43, also a senior equity dealer at FSIS, joined the pair in their scheme in August 2008 and received an equal cut of the profits.

Deputy Public Prosecutor Hon Yi told the court on Wednesday that the activities went on for seven years without detection.

DPP Hon also noted that Leong and Toh had possessed information on FSIS orders that was not generally available, such as the size and price range.

"The information ... would be expected ... to be profitable if the person had traded on (it)," he said.

"The information, taken with the fact that FSIS's orders were usually substantial, would have a material effect on the price of the shares."

All three were found guilty of offences under the Securities and Futures Act.

Leong was sentenced to three years' jail, E for 30 months and Toh for 20 months.

The terms took into account the different amounts of the gains they have returned and the amount of time they participated in the scheme.

Defence lawyer Thong Chee Kun of Rajah & Tann said front-running, unlike insider trading, does not necessarily affect the inherent value of an equity and should be less reprehensible.

He added that there was "no guarantee of profit" in this case or evidence of adverse market distortion caused at the expense of other investors.

Principal District Judge Ong Hian Sun said in sentencing that he agreed with the prosecution that general deterrence was needed to maintain the integrity of the trading system. He also considered the huge profits that were made.

Leong and E reaped about S$2.6 million each, while Toh made around S$2.3 million.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to