The Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) announced on Feb 1 that they have launched a joint investigation on Jan 12 into companies under CoAssets (CoAssets Group Companies) for possible offences under the Penal Code (Cap. 224) and the Securities and Futures Act (SFA) (Cap. 289).
Chapter 224 of the Penal Code looks into the “wrongful gain” or “wrongful loss” of property, or the act of causing wrongful gain.
Chapter 289 of the SFA looks into regulation of activities and institutions in the securities and derivatives industry. This includes leveraged foreign exchange trading of financial benchmarks and of clearing facilities.
Of the CoAssets Group Companies, only CA Funding is regulated by MAS as a capital markets services licensee.
According to MAS, it issued a direction to CA Funding in March 2020 to prevent the company from listing new issuances, onboarding new investors and accepting subscription of securities
The direction were given after an investigation by MAS uncovered lapses in CA Funding’s credit assessment process.
The investigation also found that there was inadequate disclosure of information to investors. CA Funding also failed to address conflicts of interests arising from dealings that the CoAssets Group Companies had with entities related to issuers that CA Funding had listed on its platform.
MAS also directed CAFPL to appoint an independent external auditor to review the effectiveness of its remedial measures to address these deficiencies.
In December 2020, CA Funding informed MAS that it had failed to comply with the minimum base capital requirement under the SFA and that it intended to cease operations.
CA Funding has since returned investors their funds.
MAS says it is “closely monitoring” CA Funding’s implementation of its cessation plan, to ensure that investors are treated fairly.
