SINGAPORE (Mar 20): State prosecutors have called for Goh Hin Calm to be jailed a total of three years, after taking into account two sentencing precedents involving stock market manipulation.
The alleged “treasurer” in the 2013 penny stock crash, Goh on Wednesday pleaded guilty to two charges under Section 197 of the Securities and Futures Act.
The prosecution called for a sentence of three years’ imprisonment for each of the charges, with the two sentences to run concurrently.
In High Court on Wednesday, the prosecution says its sentencing submissions take into account separate previous cases of stock market manipulation involving Anthony Soh Guan Cheow, the former head of Jade Technologies, and Ng Geok Eng, who manipulated the share price of Autron Corporation.
Soh was fined $50,000 and had his sentence lengthened to 11 years’ imprisonment following a failed appeal for charges that included market rigging and insider trading, as well as giving false reports to the Singapore Exchange.
In 2008, Soh had made a buyout offer to acquire Jade Technologies, in an attempt to raise its slumping share price. It was found that he did not have the money to carry out the takeover, and later withdrew the offer – but not before some $10 million worth of Jade Technologies shares had been sold at inflated prices.
In its sentencing submissions for Goh, the prosecution says Goh had lower culpability than Soh, as he was not the mastermind of the scheme.
Goh’s defence counsel on Wednesday also argued that Goh was merely "playing a peripheral role."
"Sentencing should take into account the limited role, notwithstanding the scheme at large," says Goh's counsel, Adrian Wee, a director at Characterist LLC.
The way the prosecution sees it, Goh had intentionally aided alleged mastermind John Soh Chee Wen and his associate Quah Su Ling in the alleged stock manipulation saga in 2013.
However, prosecutors note that the scale of the 2013 penny stock crash which Goh was involved in was much larger, and the harm caused in the case was much higher.
“For example, in Jade Technologies, the price of the shares of one company was manipulated, whereas in the present case, the entire market in the shares of three companies were manipulated,” the prosecutors say in court documents. “The monetary losses caused to financial institutions alone, in the present case, is almost five times as much as the loss caused in Jade Technologies.”
In addition, the distortion in the market for Jade Technologies shares had lasted for less than two months, while manipulation in the 2013 penny stock saga lasted for as long as 14 months.
Next, prosecutors cited the case of Ng, who had between April 2002 and April 2003 used a number of trading accounts belonging to himself, his wife and a friend to manipulate the share price of Autron Corporation.
Ng was sentenced to six months’ imprisonment and fined $150,000.
However, prosecutors note that a critical factor considered in Ng’s sentencing was that “no losses were proven” in the case.
“This is materially different from the present case, where there were colossal losses, including more than $350 million in losses caused to financial institutions that remains unpaid,” prosecutors presented in court documents. “The scale and sophistication of this scheme (the 2013 penny stock crash) was also on an entirely different level.”
In addition, prosecutors point out that Ng had used at least 18 accounts to manipulate Autron Corporation’s stock price, while the Goh and his associates had used some 189 accounts for their manipulation.
“In Ng Geok Eng, the High Court held that it is imperative for the law to unequivocally express its abhorrence for persons who surreptitiously attempt to disrupt the forces of market fair play in such a severe and calculated manner. That imperative is ever more pressing in the present case,” the prosecutors submitted.
According to prosecutors, Goh helped perpetuate “the most audacious, extensive and injurious market manipulation scheme ever in Singapore.”
In October 2013, the penny stock crash had wiped out some $8 billion in shareholder value.
The prosecution described the case as an egregious form of disruption to the orderly conduct of our securities market”, that “strikes at the fundamental integrity of our securities market”.
Section 197 of the SFA, they add, “protects the forces of supply and demand in the securities market from artificial distortions”, ensuring that participants interact in a fair and efficient market.
