Financial Crime World

Securities Commission Secures Victory in Insider Trading Case at Court of Appeal

Overturning of Acquittal Decision for Datuk Ramesh Rajaratnam

KUALA LUMPUR — In a significant win for the Securities Commission (SC), the Court of Appeal unanimously overturned a 2021 High Court decision that had acquitted Datuk Ramesh Rajaratnam, the former executive deputy chairman of Malaysian Merchant Marine Bhd (MMM), of insider trading charges.

The Errors of the High Court

A three-judge panel, comprised of Justices Datuk Vazeer Alam Mydin Meera, Datuk Ahmad Zaidi Ibrahim, and Datuk Wong Kian Kheong, ruled that the High Court had erred by not considering the merits of the case when acquitting Ramesh.

The Duty of the Appellate Court

Wong, who delivered the Court of Appeal’s broad grounds, emphasized that the appellate court holds a judicial duty to consider the merits of the appeal. This duty includes:

  1. Scanning through the appeal records,
  2. Evaluating written submissions, and
  3. Listening to oral arguments.

The Decision’s Implications

As a consequence, the Court of Appeal set aside the High Court’s decision on the first charge and restored the earlier conviction and sentence issued by the Sessions Court. The case is to be remanded back to the High Court for a hearing on the merits before another judge. Ramesh’s bail conditions remain intact.

Background and Charges

Ramesh was originally charged with three counts of insider trading at the Kuala Lumpur Sessions Court on April 29, 2015. After a lengthy trial in September 2019, he was convicted on all three counts under Section 188(2)(a) of the Capital Markets and Services Act (CMSA) and sentenced to five years imprisonment and a RM3 million fine (or three years imprisonment in default) for each charge. The prison terms were ordered to run concurrently.

However, on May 20, 2021, the High Court granted Ramesh an appeal and quashed the conviction and sentence on all three charges. With the SC and the public prosecutor’s consent, the SC chose not to appeal the second and third charges. Ramesh then filed an appeal against his acquittal to the High Court.

Enforcing the Capital Markets and Services Act

Under the CMSA, insider trading can result in a punishment of up to a 10-year imprisonment term and a minimum fine of RM1 million. The SC’s commitment to uphold the law and curb insider trading was reinforced by this victory.