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Three charged with alleged spoofing of futures market, providing false statements to SGX

THREE men have been charged in relation to alleged instances of "spoofing" in the Singapore derivatives market, and with allegedly providing false information to the Singapore Exchange (SGX).

The three individuals are: Jimmy Ng Kian Bin, 35, who faces five charges; Erik Ng Song Hann, 48, with four charges; and Joseph Chai Ming Leong, 42, with two charges. All three are Singaporeans from Joerik Financial Pte Ltd, a proprietary trading firm and a trading member of the SGX Derivatives Trading (SGX-DT).

Spoofing typically occurs when an errant trader submits fake orders, which are then rapidly cancelled, to create a false impression of supply and demand in the market for a particular security. Authorities allege that Jimmy Ng and Erik Ng entered and deleted a series of buy and sell orders during the relevant periods, inducing other market participants to enter the market on the belief that they were observing real bids and offers.

The prosecution is also alleging that the trio falsely told authorities that Jimmy Ng was testing a trading algorithm, and that Erik Ng was doing arbitrage trading.

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This case is also the first under the joint investigations arrangement between the Monetary Authority of Singapore and the Commercial Affairs Department where authorities are prosecuting a person for the employment of deceptive devices in futures contracts, and for the furnishing of false statements to the SGX.

According to charge sheets seen by the Business Times on Wednesday, Jimmy Ng faces four counts of defrauding other market participants by simultaneously entering and deleting a series of buy and sell orders for the SGX MSCI Singapore Index July 2015 Futures (SGN15) in July 2015. The fifth charge alleges that he conspired with Chai and Erik Ng to furnish a false statement to SGX-DT with regards to his trading in the SGN15.

Erik Ng faces two charges related to trades in the July 2016 and August 2016 contracts of the SGX MSCI Taiwan Index July 2016 Futures. His other two charges relate to allegations of furnishing false information.

Chai's two charges relate to furnishing false information to SGX-DT.

Both Jimmy Ng and Erik Ng are currently out on bail, while the charges against Chai are non-arrestable offences, where bail is not required.