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Remisier concedes front-running before executing trading instructions from defendant
AN OCBC Securities remisier said during the ongoing penny stocks trial that market intelligence shared between brokers and clients, who then acted on the information, could push up share prices.
The prosecution witness also conceded under cross-examination on Friday that he had front-run instructions from one of the accused, Quah Su-Ling, 54.
Remisier Ng Kit Kiat has earlier told the court that he took instructions from Quah and her co-accused John Soh Chee Wen on trades of Blumont Group, Asiasons Capital (now Attilan Group) and LionGold Corp, collectively known as BAL from August 2012 to Oct 3, 2013.
Quah and 59-year-old Soh are said to have controlled a web of 189 accounts to manipulate the market for the BAL counters, and used intermediaries and brokers like Mr Ng to operate the scheme.
On Friday, the fourth day of the joint trial of the two accused, Quah's lawyer, Philip Fong, placed a spotlight on the flow of information in the market. Under questioning, Mr Ng agreed with Mr Fong that brokers share market intelligence with one another as well as with clients, and that such activity could push up the price of a counter when they act on the information to trade.
Mr Ng also conceded that after receiving trading instructions from Quah, he placed trades for his wife before executing the orders that Quah had requested.
Mr Fong drew out that concession after presenting Mr Ng, who initially denied front-running, with two instances in 2013 in which Mr Ng had placed orders through his wife's account ahead of similar trades for other accounts that the prosecution said were improperly controlled by Soh and Quah.
Front-running occurs when a broker does a personal trade on a stock, acting on knowledge that his client wants a trade executed on the stock later. There is an opportunity to profit by trading in advance of customers' orders and closing out one's position following the share price movements caused by the execution of the customers' orders.
Mr Ng testified that Quah would sometimes instruct him to hold back trade orders for a while, this explained why her trade was not keyed in immediately. However, Mr Fong pressed him: "But the whole point is after Quah Su-Ling had given you instructions, you keyed in your wife's order first."
Mr Ng: "Looks like. "
Mr Fong: "Do you agree you were front-running in this case? "
Mr Ng: "Yes."
Soh's lawyer N Sreenivasan said Mr Ng "has indulged in the worst case of front-running possible", when the Senior Counsel was responding to Justice Hoo Sheau Peng's question on whether or not the defence is not disputing that trading instructions were given to Mr Ng.
Soh is not denying he made certain calls at certain times, Mr Sreenivasan said, without further elaboration.
When cross-examining Mr Ng, Mr Fong said that Quah did not use accounts belonging to others including Ms Ng Su Ling's to conduct trades through this witness without Ms Ng's written authorisation.
Mr Fong suggested that the remisier had mistaken Quah to be Ms Ng, because both have the same given names. But Mr Ng, who takes trade orders by phone, disagreed and testified that the two women have different voices.
Ms Ng was then an independent director of LionGold and her accounts were among those that the prosecution alleged were controlled by the two accused.
Mr Fong also tried to poke holes in Mr Ng's testimony on how he updated Quah and Soh on the alleged unauthorised trades. The lawyer said some of the reports Mr Ng sent via SMS were incomplete or erroneous, making these reports not meaningful.
Mr Fong said: "You were in fact not reporting to Ms Quah or 'Peter Chew'."
Soh was said to have used the name "Peter Chew" in his dealings with Mr Ng.
The witness disagreed and explained that he had made typographical errors in some reports. Further, the reports were supposed to reflect only the buy trades.
Mr Fong argued that Soh and Quah did not ask for these daily reports, but Mr Ng shot back saying the duo did not stop him from sending them either.
Mr Ng is the first prosecution witness to take the stand in the trial, which is a culmination of investigations into the circumstances that led to the early October 2013 collapse in the BAL shares, which saw S$8 billion wiped off in their market value in a span of three days.
A third defendant, Goh Hin Calm, has already pleaded guilty to abetting Soh and Quah, allowing them to use his accounts and helping them keep tabs on their shareholding of the BAL shares.
The trial has been adjourned until April 22.