Financial Crime World

Singapore Cracks Down on Financial Fraud: Authorities Collaborate to Combat Insider Trading, Market Manipulation, and Money Laundering

Amidst a global surge in financial crime, Singapore, a leading financial hub, has seen its fair share of high-profile cases. The latest scandal involved ties between financiers in Singapore and the troubled Malaysian state fund, 1MDB, resulting in the shutdown of BSI Bank and the Singapore branch of Falcon Private Bank, with S$30m in fines being imposed.

Increase in Financial Crime Cases in Singapore

The Monetary Authority of Singapore (MAS) reported a significant increase in financial crime cases between 2017 and 2018. During this period, one criminal conviction, S$16.8m in financial penalties and compositions, and S$698,000 in civil penalties were meted out. Additional measures included 19 prohibition orders, 37 reprimands, 223 warnings, and 444 supervisory reminders.

Key Statistics:

  • 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

The complexities and volumes of financial transactions, as well as the rise in cross-border transactions, pose challenges for Singaporean authorities in effectively combating financial crime.

Key Players in Singaporean Financial Regulation

  • Commercial Affairs Department (CAD) of the Singapore Police Force: The primary agency dealing with white-collar crime, including financial fraud.
  • Monetary Authority of Singapore (MAS): Conducts investigations and ensures compliance with provisions and regulations under the Securities and Futures Act (Cap. 289).
  • Attorney General: Holds sole prosecution powers and controls the prosecution of offenses, including financial crimes and corruption cases.

Collaboration Between MAS and CAD

Since March 2015, MAS and CAD have collaborated on joint investigations. This strategy allows for a streamlined and optimized investigation process and ensures any market misconduct is swiftly detected and efficiently dealt with.

Joint Investigations:

  • Insider trading
  • Market manipulation
  • Other financial crimes

Insider Dealing and Market Abuse

Regulated by the Securities and Futures Act (Cap. 289), insider dealing and market abuse are crucial concerns in Singapore. Relevant offenses include false trading, market-rigging transactions, market manipulation, and insider trading. Penalties include fines of up to S$250,000 and imprisonment for up to seven years.

Combating Corporate Fraud and Other Offenses

Corporate fraud can take various forms, such as dishonest misappropriation, criminal breach of trust, cheating, and forgery. The Companies Act (Cap. 50) outlines specific offenses, including making false and misleading statements and breaching directors’ duties.

Fight Against Bribery and Corruption

Bribery and corruption are major concerns in Singapore, with the Prevention of Corruption Act (Cap. 241) and the Penal Code governing offenses involving public servants and officials. The Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A) enables the seizure of corrupt gains.

Singapore’s Commitment to Combating Money Laundering and Terrorist Financing

Singapore is an active member of the Financial Action Task Force (FATF), dedicated to implementing measures to combat money laundering, terrorist financing, and other related threats to the international financial system. The Corrupt Practices Investigation Bureau Act (Cap. 241A) and the Organised Crime Act 2015 set out relevant legislation for these offenses in Singapore.

Continuing Efforts to Enhance Financial Crime Detection and Prevention

MAS plans to implement measures such as stricter disclosure of corporate information by listed companies, enhanced business conduct of financial advisers and their representatives, increased surveillance and investigations into suspected insider trading, and advanced data analytics and augmented intelligence tools for detecting market manipulation and money laundering activities.

Effective collaboration between MAS and CAD and strengthened enforcement efforts are crucial in Singapore’s ongoing battle against financial crime.