SUN WEIYEH v PUBLIC PROSECUTOR

Facts

Sun Weiyeh was a portfolio manager, director and majority shareholder of One Asia Investment Partners Pte Ltd, which managed sub-funds of the Arion Asia Credit Fund. When the majority investor in one sub-fund (SP1) sought redemption, SP1's assets, including blocks of MIE18 and MIE19 bonds, had to be sold. On 18 January 2016 he invested US$3m in another sub-fund (SP5), becoming its majority owner. On 19 January 2016 he sought bids for the bonds. Morgan Stanley bid US$33 and US$32 for the whole block, confirmed within seconds of his query, and other counterparties also bid. He accepted none of them. Instead, through Pareto Securities as intermediary, he sold the bonds from SP1 at US$25.375 and US$21.875 and bought them into SP5 at US$25.50 and US$22.

A district judge convicted him on two charges under s 201(b) of the Securities and Futures Act of engaging in acts likely to operate as a fraud on SP1's investors, and imposed concurrent terms of six months' imprisonment. He appealed against conviction and sentence in Magistrate's Appeal No 9126/01 of 2024.

Issues

1. Whether fraud under s 201(b) of the SFA requires deception and a specific intent to defraud.
2. Whether the appellant acted dishonestly in the pass-through trades.
3. Whether the custodial threshold was crossed and the sentence was manifestly excessive.

Holding

The High Court dismissed the appeal against conviction and sentence, upholding the convictions on both charges and the aggregate sentence of six months' imprisonment. He was granted a two-week deferment to begin serving it.

Reasoning

Section 201(b) is a broad catch-all provision to protect investors. The Penal Code definition of fraudulently did not apply, and fraud was not limited to cases of deception. US authorities did not require a specific intent to defraud. The touchstone was dishonesty: where a person expected not to act against another's financial interests intentionally acts knowing it will harm them, that is dishonest, particularly if he gains from it.

The court found it hard to believe he missed Morgan Stanley's prompt confirmation, and the later refresh message did not mean the bank had lost interest. He chose to sell to a fund he effectively owned because he liked the bonds, gave Morgan Stanley a false reason for not selling, and the district judge was entitled to disbelieve that he missed BNP's bids. Pareto merely facilitated trades he directed. The only inference was that he acted dishonestly to enrich himself at SP1 investors' expense.

On sentence, the investors lost US$324,500, he profited, the offences abused his position, were premeditated and came to light only through a whistleblower. Precedents showed abuse of position generally attracts imprisonment, and with no remorse or restitution six months was not manifestly excessive.

From the judgment