Financial Crime World

Singapore Cracks Down on Financial Crime: A Joint Effort by MAS and CAD

Financial crime continues to pose a significant challenge to the global economic landscape, including in the Financial Hub of Singapore. High-profile cases, such as investigations into ties between financiers in Singapore and the troubled Malaysian state fund 1MDB, have made headlines and highlighted the need for stricter measures to combat financial misconduct.

Combating Financial Crime in Singapore

Notable actions taken against offenders include the closure of BSI Bank and the Singapore branch of Falcon Private Bank, resulting in S$30m worth of fines. According to the Monetary Authority of Singapore (MAS)’s most recent report, between 1st July 2017 and 31st December 2018:

  • One criminal conviction
  • S$16.8m in financial penalties and compositions
  • S$698,000 in civil penalties
  • 19 prohibition orders
  • 37 reprimands
  • 223 warnings
  • 444 supervisory reminders were issued.

Despite the increase in volume and complexity of financial transactions and the growth in cross-border transactions, the Commercial Affairs Department (CAD) and MAS are taking a joint approach to tackle market misconduct.

Joint Investigations Arrangement

Since March 2015, MAS and CAD have launched a joint investigations arrangement, optimizing the investigation process and ensuring that any market misconduct is quickly detected, investigated, and dealt with efficiently. The agencies pool their investigative resources and expertise, drawing on MAS’s role as a financial regulator and CAD’s financial crime investigation and intelligence gathering capabilities.

Types of Financial Crimes

Insider Dealing and Market Abuse

The Securities and Futures Act (SFA) is Singapore’s principal legislation dealing with insider dealing and market abuse. Offences under the SFA include false trading, market manipulation, making false statements, and insider trading, which can result in fines of up to S$250,000 and imprisonment for a term of up to seven years.

Corporate Fraud

Corporate fraud, including theft, criminal breach of trust, cheating, dishonest disposition of property or payment of debts, and forgery and falsification of accounts, are also common in Singapore. Individuals and companies alike can be held responsible for attempts, abetment, or conspiracy to commit these offences. Specific corporate fraud offences can be found in the Companies Act.

Bribery and Corruption

The Prevention of Corruption Act and the Penal Code contain the primary regulatory provisions in Singapore related to bribery and corruption. The Corrupt Practices Investigation Bureau, an independent agency reporting directly to the prime minister, is responsible for investigating allegations of corruption.

Money Laundering and Terrorist Financing

Singapore remains vigilant against money laundering and terrorist financing as a member of the Financial Action Task Force (FATF). Singapore has implemented strong legal and regulatory frameworks to detect and deter these crimes, with the CDSA and the Organised Crime Act being the main legislations dealing with these offences.

Measures to Address Financial Crimes

Despite these efforts, financial crimes can be challenging to detect and address due to the ease of money transfers across borders. To enhance its measures, MAS has announced its plans to strengthen consumer protection, ensure financial advisers’ business conduct, enforce AML/CFT requirements, and investigate suspected insider trading. Additionally, MAS has adopted advanced technologies under ‘Project Apollo’ to increase the precision of its AML/CFT monitoring and detect market manipulation.

Case Resolution

Cases involving criminal prosecutions take approximately 33 months, followed by 30 months for cases with civil penalties, six months for regulatory actions, and three months for referrals to external agencies. The average time taken across all concluded cases was roughly eight months.

Conclusion

As financial crime continues to evolve, Singapore’s regulatory authorities remain committed to staying one step ahead, adapting their measures to address emerging threats and safeguarding public trust in Singapore’s financial system.