Sending The Right Signals on Corporate Liability for Employee Insider Trading  

Oleh:

Loke, Alexander F. H.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Singapore Journal of Legal Studies (Jul. 2005), page 137-149.
Topik: insider trading; right signals; corporate liability; employee; insider trading

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS46 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

Lihat Detail Induk

Isi artikel

The recent enforcement action taken by the Monetary Authority of Singapore ("MAS") against three employees of the Government of Singapore Investment Corporation ("GIC") is the first publicized case in Singapore involving cross border insider trading under the Securities and Futures Act. The present article looks at the impact of the new insider trading provisions on enforcement across borders, and more substantially, the apparent Singapore legal position on corporate liability for insider trading by corporate agents. While the three GIC employees were made to pay civil penalties, the MAS took the position that GIC itself was not liable because its senior executives were unaware of the transactions. One implication is that a corporation is legally entitled to keep the fruits of its agents' unlawful activity. Such a result was, fortunately, avoided in the GIC case by the corporation volunteering to turn over its gains to the MAS. The author argues that a more purposive and holistic reading of the statutory provisions permits a wider interpretation, one that would result in a more coherent law on insider trading. Even if the narrow position is the right one to adopt, the untenable consequence prompts legislative amendments to reverse the position. The author argues first for necessary clarification in the law on corporate liability for insider trading. Second, he argues for rules to conduce corporations toward taking robust safeguards against insider trading by its employees. Third, he argues for a distinct rule to deprive corporations of the fruits of unlawful activity, this notwithstanding the fact that the employee was on a frolic of his won and that the corporation is not blameworthy.

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