Title: Singapore’s Joint Crackdown on Financial Fraud: A Collaborative Effort Between CAD and MAS

Financial crime continues to pose a significant threat to the global economy, and Singapore, as a major financial hub, is not immune. In recent years, the city-state has seen an increase in high-profile financial fraud cases, such as those linked to connections between financiers in Singapore and the troubled Malaysian state fund, 1MDB.

Rising Tide of Financial Fraud in Singapore

According to the Monetary Authority of Singapore (MAS)’s latest report, between July 1, 2017, and December 31, 2018:

• One criminal conviction was meted out.
• S$16.8 million in financial penalties and compositions were imposed.
• S$698,000 in civil penalties were issued.
• 19 prohibition orders were issued.
• 37 reprimands were handed out.
• 223 warnings were given.
• 444 supervisory reminders were issued.

The increasing volume and complexity of financial transactions, as well as the growth in cross-border transactions, present challenges for the Singapore authorities in their efforts to curtail financial crime.

CAD and MAS: A Powerful Partnership Against Financial Fraud

The Commercial Affairs Department (CAD) is Singapore’s principal white-collar crime enforcement agency, focusing on commercial fraud and financial fraud cases. MAS, on the other hand, is Singapore’s central bank and the body responsible for regulating and supervising financial institutions within the country.

Since March 2015, CAD and MAS have collaborated through a joint investigations arrangement. The arrangement has streamlined the process and led to swifter detection, investigation, and efficient handling of any market misconduct. It also pools their investigative resources and expertise: MAS’s role as a financial regulator and CAD’s financial crime investigation and intelligence gathering capabilities.

Notable Results of Their Collaboration

One of the most significant cases resulting from this arrangement was the October 2013 penny stock crash involving three Singapore-listed companies—Asiasons Capital Ltd, Blumont Group Ltd, and LionGold Corp Ltd. This was the largest market manipulation case in Singapore’s history, leading to the formation of the joint investigations arrangement to cover offenses such as insider trading and market manipulation.

Concerns and Legislation: Insider Dealing, Market Abuse, Corporate Fraud, and More

Insider Dealing and Market Abuse

Insider dealing and market abuse are major concerns in the financial industry. The Securities and Futures Act (SFA) outlines relevant offenses, including false trading and market-rigging transactions, market manipulation, false statements, fraudulent inducing, insider trading, and the employment of manipulative and deceptive devices. Penalties include a fine of up to S$250,000 and imprisonment for a term of up to seven years.

Corporate Fraud

Corporate fraud, including theft, dishonest misappropriation, criminal breach of trust, cheating, and forgery, is another area of concern. Individuals and companies can be deemed guilty of these offenses under the Penal Code and the Companies Act.

Bribery and Corruption

Bribery and corruption present additional causes of fraudulent actions in Singapore. The Prevention of Corruption Act (Cap. 241), Chapter IX of the Penal Code, and the Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A) (CDSA) are the primary regulatory provisions. The Corrupt Practices Investigation Bureau (CPIB) is the dedicated agency responsible for investigating corruption, and it reports directly to the prime minister to maintain independence.

Money Laundering and Terrorist Financing

As a member of the Financial Action Task Force (FATF), Singapore has implemented a robust legal and regulatory framework to detect and deter money laundering, terrorist financing, and breach of financial/trade sanctions. The CDSA is the main legislation, and Singapore maintains a strict stance against terrorist financing under the Terrorism (Suppression of Financing) Act (Cap. 325) (TSFA), as revised in 2018.

Continued Efforts Against Financial Fraud in Singapore

Despite the challenges, the regulatory authorities in Singapore remain dedicated to addressing financial fraud through the continued collaboration between CAD and MAS. Their partnership has led to several advances, such as increased surveillance and investigations into suspected insider trading and the harnessing of data analytics and augmented intelligence for more precise AML/CFT monitoring and market manipulation detection.