Kevin Lew Chee Fai, found liable in Singapore’s first civil lawsuit for insider trading, was fined S$67,500 ($49,100) for selling shares of WBL Corp., a Volvo and Jaguar car distributor.
“The right signal has been sent to the market,” Judge Lai Siu Chiu said at a hearing today. Lew, 50, was Singapore-based WBL’s chief financial officer until July 2007, when he was asked to resign.
The Monetary Authority of Singapore sued Lew, who avoided a loss of S$27,000 by selling WBL shares two days after learning it was forecast to report losses on July 2, 2007. The financial regulator said after winning the case in May that insider trading “undermines investor confidence in the integrity” of the city’s capital markets.
“This will act as a deterrent to anyone who even contemplates insider trading,” said Nicholas Hanna, a partner at London-based law firm Watson, Farley & Williams’s Singapore office. “Anyone who has price sensitive information and trades on it is abusing the process and should be punished.”
Lew sold 90,000 WBL shares at S$4.98 each on July 4, 2007, even after the company’s in-house lawyer said the information shared at the meeting was price-sensitive, according to court papers. Lew in his defense said he didn’t believe the matters discussed on July 2, 2007, were price sensitive and sold the shares to raise cash to exercise his WBL options.
Lew’s lawyer Thio Shen Yi asked Judge Lai to impose the minimum fine of S$50,000 as Lew has been in financial hardship since July 2007 and this was a “one-off incident.” Lew plans to file an appeal by July 29, Thio said after the fine was announced.
The regulator’s lawyer Cavinder Bull sought the maximum penalty of S$81,000, or three times the loss avoided to be imposed, to send a deterrent message. Lew also “showed no remorse” for his actions and had even “conjured up stories to conceal his conduct,” the lawyer from Drew & Napier LLC said.
The former WBL executive, whose last annual salary was more than S$300,000 a year, was unlikely to be in financial hardship as he owned two apartments, two cars and about S$1 million in shares, Bull said.
WBL shares have dropped 10.1 percent this year, compared with a 2 percent increase on the benchmark Straits Times Index.
The watchdog has also sued Tan Chong Koay and Pheim Asset Management Sdn. in the city’s first civil lawsuit for stock rigging.
The case is Monetary Authority of Singapore vs Kevin Lew Chee Fai S71/2009 in the Singapore High Court.