MAS Slaps Liao Chun-Te with $164,750 Penalty for Insider Trading

The Monetary Authority of Singapore (MAS) has obtained a default judgment against Mr Liao Chun-Te (Mr Liao) to pay a civil penalty of $164,750 for insider trading. Mr Liao had sold shares in Oceanus Group Limited (Oceanus) while in possession of non-public and materially price-sensitive information concerning a proposed rights issue by Oceanus.

Oceanus, a company listed on the Singapore Exchange, had on 7 June 2013 announced a rights issue of new ordinary shares (Rights Shares). The issue price of $0.029 per Rights Share represented a discount of approximately 42% to the closing price per ordinary share on 6 June 2013.

Before the announcement, Mr Liao had provided an irrevocable undertaking to Oceanus to subscribe for the Rights Shares under the rights issue, with knowledge that the Rights Shares would be issued at a discount.

While in possession of such non-public and price-sensitive information, Mr Liao sold a total of 6 million Oceanus shares on three separate occasions, avoiding a loss of approximately $65,900.

MAS commenced the civil penalty action under section 219(2)(a) of the Securities and Futures Act (SFA) against Mr Liao for insider trading and served the court papers on Mr Liao, a foreign national, overseas. As Mr Liao failed to enter an appearance in Court, MAS obtained a default judgment against him on 26 October 2021.