UNIVERSITI TEKNOLOGI MARA SHAH ALAM

FACULTY OF BUSINESS AND MANAGEMENT

Fakulti Pengurusan Perniagaan

ISSUES AND ETHICS IN FINANCE

(FIN657)

ASSIGNMENT 1 (ETHIC CASE)

Prepare by : Mohamad Saniy Bin Mohamad Sidek (2017681886)

Prepare for : Dr. Balkis Binti Haris

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Table of Content

NO CONTENT PAGE
1 INTRODUCTION 3
2 WHAT IS MANIPULATION 4
3 LESSON LEARNED 5
4 CONCLUSION 6
5 REFERENCE 7

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 Introduction

The Court of Appeal unanimously upheld convictions against two former directors of the
Impetus Group of Companies, Datuk Phillip Wong Chee Kheong, 54, and Francis Bun Lit Chun,
46, for manipulating Suremax Group Bhd shares over a period of four months.

In a statement from the Securities Commission Malaysia (SC) today, it was revealed that the
President of the Court of Appeal Justice Tan Sri Md Raus Shariff together with Justice Datuk
Hamid Sultan Abu Backer and Justice Idrus Harun affirmed the convictions and sentences that were
meted out by the Sessions Court.

As a result, Wong is jailed for two years and fined RM3 million, while Bun is jailed for
three months and fined RM2 million. The jail sentences commenced today.

To recap, the manipulation, which was committed between November 2004 and March
2005, resulted in charges brought by the SC in October the same year. Wong and Bun were then
convicted in 2011 by the Sessions Court, after hearing 38 prosecution witnesses.

In persuading the Court of Appeal to consider the gravity of the offence committed, the SC's
prosecution team highlighted that market manipulation is not a victimless offence.

Many account holders whose accounts were used in this manipulation suffered millions of
ringgit in losses. The manipulation committed in this case had the effect of increasing the price of
Suremax shares by 77% in a span of four months," read the SC's statement

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What is Manipulation

The cases are about market manipulation. What Is market manipulation? It is purposeful
double dealing by stock merchants, investors, or brokers trying to distort or change showcase
costs. The explanation they need to control the market is a result of they need to contend and
acquire more benefit. Market control is illicit in many nations, for example, United States, along
these lines it's unlawful under the Securities Exchange Act of 1934. This is a very normal event,
up by 37% in the most recent decade as indicated by the Securities and Exchange Commission
(SEC).

Control takes numerous structures in the business sectors as these individuals can limit the
cost of a security by putting in several little requests at a lower cost. The financial specialists give
their feeling that there is some kind of problem with the organization, so they sell, pushing the
costs even lower. This is a case of control is put in concurrent purchase and sell requests through
various agents that counteract one another however give the observation, due to the higher
volume that there is expanded enthusiasm for the security.

Market control comes in numerous shapes and sizes. Coming up next are a couple of
instances of various sorts of market control.

• Churning - This is when traders place buy-and-sell orders at the same price, and this is
usually meant to attract more investors and increase the price at the same time.
• Painting the tape - Here, a group of traders creates rumors or activities to increase the
stock price. This is also known as ‘Ramping’ or ‘Runs.’
• Wash trading - The trade sells and re-purchases the same security or a substantial amount
of the same security to generate more activity and increase the price as well.
• Bear raiding - This is where a trade attempts to reduce the stock price through either short
or heavy selling.
• Cornering the market - This is the scenario where the trader purchases enough of a certain
commodity, stock or another asset in order for him or her to control the supply and be
able to determine the price for it.

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• Insider trading - Here, insiders with critical and confidential information about a business
capitalize on that knowledge to make a profit and avoid losses via buying and selling of
stock

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Lesson Learned

The lesson learn from this case are:

• Power Abuse

- No matter your police or someone that have power, you’ve to trustworthy in any job that you have given to.
On this case, due to the capacity of having the force and the system, Datuk Phillip Wong Chee Kheong and
Francis Bun Lit Chun do such wrongdoing made him expected that he can control the market.

• A dark future
Following this heavy case, the future will be not good because the trust that given to him, he manipulates
that gave him the benefit

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Conclusions
In a conclusion of this cases, people tend to breach trust and abuse his power that given to make
money in an easy way and benefit to them. This refer to this case about how Datuk Phillip Wong
Chee Kheong and Francis Bun Lit Chun misuse his power by manipulate the market

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References

1. https://www.sc.com.my/resources/media/media-release/two-directors-jailed-and-fined-over-
suremax-share-manipulation

2. https://www.theedgemarkets.com/article/court-appeal-jails-two-former-directors-manipulating-
suremax-shares

3. https://www.investopedia.com/terms/m/manipulation.asp