Court Upholds Insider Trading Conviction Against Former Deputy Chair of Patimas Computers
The Court of Appeal recently confirmed the High Court’s ruling on insider trading involving former Patimas Computers Bhd deputy chairman Datuk Raymond Yap Wee Hin. The Securities Commission Malaysia released a statement stating that the High Court’s judgment from 2022 was upheld by the three judges on the Court of Appeal panel.
In agreement with the High Court’s decision, the Court of Appeal rejected Yap’s appeal and directed him to pay RM3.28 million in disgorgement to the SC. This amount represents three times the losses avoided through insider trading, as determined by the SC.
Additionally, the Court of Appeal declared that the SC has the authority to seek civil penalties of up to RM1 million for such violations under the Capital Markets and Services Act 2007. Yap was ordered to pay the maximum penalty. Furthermore, he has been banned from serving as a director of any listed company for five years, starting from the date of the High Court’s ruling on April 7, 2022.
The Securities Commission Malaysia revealed that Yap engaged in insider trading by selling 43.8 million Patimas shares previously owned by former managing director Law Siew Ngoh between June and July 2012. This occurred while Yap possessed undisclosed material information regarding audit concerns and questionable transactions between Patimas and its major debtors, as highlighted by Ernst & Young Malaysia during discussions with the company’s management.
Following this, Patimas’ board of directors announced on July 31, 2012, that the company would not be able to release its annual audited financial statements for the period spanning Jan 1, 2011, to March 31, 2012, due to significant unresolved audit issues.
The Securities Commission emphasized its stance on insider trading, identifying it as a violation that undermines capital market integrity and damages investor trust in the stock market. This decision by the Court of Appeal serves as a clear warning that the SC and the judicial system will not tolerate such misconduct in the financial sector.
