Former Broadway Industrial Group CFO Tan Chee Keong jailed for insider trading

TAN Chee Keong, the former chief financial officer of mainboard-listed Broadway Industrial Group, has been convicted and sentenced to 3 months and 2 weeks’ imprisonment for insider trading and acquiring benefits from criminal conduct.

Tan pleaded guilty to and was convicted of a charge under section 218(3)(a) of the Securities and Futures Act (SFA) for communicating insider information regarding Broadway shares to a friend.

He also pleaded guilty and was convicted of a charge under section 47(1)(c) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) for acquiring a sum of money from that friend.

A remaining charge under the SFA, for communicating insider information concerning Broadway shares to another friend, was taken into consideration for the purpose of sentencing.

As then CFO of Broadway, Tan had been privy to insider information when Broadway was in discussions with Platinum Equity Advisors between March and August 2016 to sell 2 of its businesses.

He disclosed information on the deal to 2 friends on numerous occasions, knowing that they would likely purchase Broadway shares.

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The 2 individuals subsequently made profits from the trading of Broadway shares.

In October 2016, Tan received S$30,000 in cash from 1 of these friends, which was his share of the profits from the insider trade.

As disgorgement of his share of the profits from the offence, Tan has paid S$30,000 to the state.

The investigations against Tan arose from a referral by the Singapore Exchange (SGX), while his conviction was a result of a joint investigation conducted by the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department of the Singapore Police Force.

The court proceedings against the 2 individuals who are alleged to have received insider information from Tan are ongoing.

“As the chief financial officer of a listed company, Mr Tan owed a duty to the company and its shareholders not to divulge price-sensitive information that has not been disclosed to the market at large. His act of conveying such information to his friends to benefit them and himself undermines public confidence in the transparency and integrity of our capital market,” said Loo Siew Yee, assistant managing director of Policy, Payments & Financial Crime at MAS.

“MAS will continue to pursue officers of companies who engage in such misconduct, to ensure a level playing field for all market participants,” she added.