SFC raps dealer for year-end buy trade
Securities dealer and investment adviser Value Partners and dealing director Cheah Cheng Hye were reprimanded by the Securities and Futures Commission for 'window-dressing' activities.
An SFC investigation found Value Partners in 1998 placed a number of buy orders on five stocks near the market close on December 28, 29 and 31.
As a result the stocks closed higher.
This is 'window dressing', when dealers try to push the share price up at the end of the year, and boost the value of portfolios they manage.
The brokerage house's dealing director Mr Cheah was responsible for these investment decisions, the SFC said.
While Mr Cheah was not trying to manipulate the price of the stocks, he should have known this manner of trading would affect the stocks' closing prices, the SFC said.
The SFC also found breaches in various regulatory requirements and a number of inadequacies in Value Partners internal procedures.
'These were found to be the result of a lack of staff training and inadequate knowledge and understanding of the regulatory requirements on the part of Value Partners senior management,' it said.
'Value Partners and Cheah, as the person with responsibility for these inadequacies, have therefore been publicly reprimanded.'
In making the reprimand, the SFC took into account Value Partners co-operation and it having hired a leading accountancy firm to review its business operations as well as hire a new compliance officer.