Friday, October 22, 2004

GIC staff fined for insider trading 

Singapore’s businessmen and officials have often been accused of being slow and excessively rule-bound. This incident may give some people hope, while making some others give up. Excerpt of news report:

GIC trio fined $715,000 by MAS
In its first such move, the Monetary Authority of Singapore (MAS) has taken civil penalty action against three Government of Singapore Investment Corporation (GIC) employees for insider trading involving Japanese shares, fining the individuals a total of $715,000. The trio...had used confidential price-sensitive information in February last year concerning a proposed offering of shares by Japan's Sumitomo Mitsui Financial Group (SMFG).

By selling the shares before SMFG made the announcement, they avoided a loss of about $710,000 for GIC. The “gains” — which GIC has volunteered to give to MAS — were not pocketed by the three employees, said the regulator in a statement yesterday...

The trio have admitted to the misconduct... In a statement, GIC said it has “severely reprimanded” the trio in writing, after considering the hefty fines borne personally by them, and the fact that “they had not personally benefited from the transactions”. They remained employed by the Singapore investment giant. However, it has “warned them that future infractions will not be tolerated”.
GIC appears to have been rather lenient in allowing the three to continue to work in the company. No doubt, the reaction would have been quite different if it had not “benefited” from the illegal action.

Nevertheless, if the trio continue to deal for GIC, I can’t help wondering whether it will affect confidence in the company.


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