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Monday, August 8, 2022
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MAN JAILED 39 MONTHS FOR FALSE TRADING INVOLVING OVER S$4.2 MILLION

On 26 July 2022, a 36-year-old man, Goh Hanshi Justin was convicted  of one count of an offence under the Securities and Futures Act (“SFA”), for manipulating the share price of Sky One Holdings Limited (“Skyone”),

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He faced 27 counts under the SFA for conducting unauthorised trades in trading accounts belonging to third parties, and five counts under cheating (by abetment) in two financial institutions.

On 26 July 2022, he was sentenced to 39 months imprisonment.

Background

Investigations revealed that between September and October 2013, Goh directed three trading representatives to push up and maintain the price of Skyone shares which were traded on the Catalist board of the Singapore Exchange.

On Goh’s instructions, the three trading representatives used 15 trading accounts belonging to their family, friends and clients to buy and sell Skyone shares for Goh’s benefit, and for the purpose of pushing up and maintaining the price of Skyone shares.

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Goh procured a further 12 trading accounts from his family and friends, to conduct trades for his own benefit. These trades were performed without the consent of the respective trading firms.

Investigations also revealed that Goh instigated three nominees (who were his friends and family members) to open share financing accounts with two financial institutions.

These accounts were opened in the nominees’ respective names, but Goh exercised full and effective control over the accounts. Goh also arranged for Skyone shares to be transferred to the nominees, to be pledged as collateral under the share financing facilities.

The loans disbursed by the financial institutions under the said facilities were then used by Goh to trade in more securities (including Skyone shares), which securities were pledged to the financial institutions as collateral for further loans disbursed.

$4.2 million

The two financial institutions were deceived into believing that the account holders had effective control over the share financing facilities and that the Skyone shares pledged thereunder were beneficially owned by the said account holders.

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The financial institutions were thereby cheated into disbursing a total of more than S$4.2 million to the share financing accounts controlled by Goh, in respect of the proceeded charges.

On 28 October 2013, Skyone shares opened at S$0.46, and fell drastically to S$0.043 by about 10.50am.

Following the crash of Skyone’s share price, the financial institutions sold the shares pledged under the facilities.

The total amount outstanding to the financial institutions in respect of the proceeded charges is S$779,845.96.

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