Preventing the next stock heist means beating the cyborgs

David Griffiths

MALAYSIAN businessman John Soh Chee Wen and his partner in crime Quah Su-Ling used classic “wash trading” techniques to engineer the biggest market-manipulation case in Singapore’s history. 

Wash trading itself is as old as securities markets, but it is becoming increasingly sophisticated as markets become more connected and trading volumes multiply. Quah’s and Soh’s conspiracy, which took nearly a decade to prosecute, demonstrates the scale of challenge that regulators and exchanges are up against today as they try to protect investors and prevent criminal activity in financial markets. It’s a technology arms race that the financial system cannot afford to lose.

The pair did everything they could to put the system to the test back in 2013. Ultimately, they gained control of over 180 trading accounts belonging to 59 individuals and corporate nominees. Their scheme drove three “penny stocks” to climb over 800 per cent in less than a year before crashing again in a three-day period that wiped out about S$8 billion (US$5.8 billion) in shar…

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