Malaysian behind Singapore penny-stocks scam jailed for 36 years

A Malaysian businessman convicted of masterminding a stock scam that wiped US$5.8 billion off Singapore’s exchange was sentenced on Wednesday to 36 years in jail by a court in the city-state.

John Soh Chee Wen orchestrated the scheme, according to court documents, and his accomplice, Singaporean Quah Su-Ling, was also given a 20-year jail term.

Both were convicted in May of using more than 180 trading accounts to inflate the share prices of three companies in what High Court judge Hoo Sheau Peng called a “scheme of substantial scale, complexity and sophistication”.

“Armed with a good understanding of the securities and financial markets, and tapping on their extensive connections and networks, they boldly exploited the system,” she said during sentencing.

“Immense harm” was caused by the stock market crash, she added.

Prosecutors called it the “most serious case” of stock market manipulation in Singapore, a global financial centre.

They detailed how the accused planned a “complex and elaborate fraud” to manipulate the share prices of Blumont Group, Asiasons Capital and LionGold Corp.

Soh and Quah used the shares as collateral, convincing several banks — including Goldman Sachs — to extend more than 170 million Singapore dollars ($123 million) in credit to finance their scheme.

They then used this cash to create demand for penny stocks, reportedly managing to push up some prices by around 800 percent in 2013.

On October 4 that year, however, prices crashed, wiping an estimated Sg$8 billion from the Singapore Exchange.

Singapore authorities say the incident dented investor confidence and directly affected trading volumes in 2014.

Soh was convicted on 180 out of 188 charges and Quah on 169 of 177 charges. They plan to file an appeal, according to court documents.