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Sslee blog

Author: Sslee   |   Latest post: Fri, 15 Feb 2019, 07:58 PM

 

The lack of deterrent sentencing for white collar crime! Whose fault?

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Dear Philip,

I refer to your blog article: Why Pump and Dumpers deserve the Death Penalty.  My sympathy and condolences to family members of your friend who had committed suicide due to debt related problems. I can understand your emotion and moment of anger in calling for capital punishment for pump and dumpers but not your reasoning.

https://klse.i3investor.com/blogs/koonyewyinblog/177104.jsp

Mental Depression Can Kill You. Learn to know the symptoms and offer understanding and help.

As of your article lets us do some facts checking on capital punishment and white collar crimes:

https://en.wikipedia.org/wiki/Capital_punishment_in_Malaysia

The following is a list of the criminal offences that carry the death penalty:

https://www.hg.org/legal-articles/white-collar-crime-in-malaysia-32066

White collar/Commercial crime:

  1. Criminal Breach of Trust
    Section 405 of the Malaysian Penal Code defines criminal breach of trust as the misappropriation, of conversion to one’s own use, of property that has been entrusted to another.
  2. Commercial Fraud
    The general prohibition against fraud in Malaysia is found in section 415 of the Penal Code. Titled “Cheating,” the code provision prohibits the use of deceit to obtain the property of another. Commercial fraud involves cheating that occurs within the context of business transactions. (illegal investment/get rich quick scam)
  3. Cybercrime/Internet Fraud
    Broadly defined, cybercrime is a crime that is committed by using the internet/phone or that requires the use of computer technology/telecommunication. The term encompasses traditional white collar crimes such as fraud or identity theft when a computer/telephone is used as the basis for the crime’s commission. (Macau Scam, love Scam and etc)
  4. Software Piracy and Product Counterfeiting
  5. Forgery/Credit Card Fraud
    Forgery, including the creation of a fraudulent credit and ATM cards, is prohibited by sections 463 to 477A of the Penal Code.
  6. Money Laundering
    Malaysia is not a worldwide center of money laundering, but its lax customs enforcement and its offshore financial services center increase its vulnerability to that crime. The Anti-Money Laundering Act 2001 defines the crime of money laundering, imposes certain reporting requirements on financial institutions, and authorizes the Minister of Finance to enforce those requirements.
  7. Other Offenses
    Other white collar offenses, serious but less widespread in Malaysia, include counterfeiting currency, loan sharking, securities and commodities fraud, insurance fraud, maritime fraud, customs offenses, and consumer fraud. Bribery and public corruption.

The primary responsibility for investigating white collar crime in Malaysia is vested in:

1. Commercial Crime Investigation Department (CCID) of the Royal Malaysian Police (RMP). The CCID works cooperatively with other agencies and institutions to combat white collar crime. As a member of INTERPOL since 1961, RMP can call upon international resources to address criminal acts that cross national borders.

2. CyberSecurity Malaysia, a specialist agency under the Ministry of Science, Technology, and Innovation, was created in 2005 to monitor national cyber security concerns.

3. The Trade Ministry brings enforcement actions concerning pirated software. While its work has been characterized as “fairly effective,” piracy rates remain high, in part because the development of cases in court has been inadequate. The Trade Ministry’s enforcement division is also charged with combating product counterfeiting.

4. MACC for case of Bribery and public/private corruption. The MACC Act 2009 came into effect on Jan 1, 2009, which led to the official establishment of the MACC as an independent, transparent and professional body to effectively and efficiently manage the nation’s anti-corruption efforts.The general penalty for any corruption related offence in the Malaysian Anti-Corruption Commission Act 2009 is (i) imprisonment for a term not exceeding 20 years and (ii) a fine of not less than five times the sum or value of the gratification or ten thousand ringgit whichever is higher. https://www.bakermckenzie.com/en/insight/publications/2018/10/the-malaysian-anti-corruption-commission

Companies/Securities Fraud:

  1. The body that has jurisdiction over the crime against Companies Act is the Companies Commission of Malaysia

https://www.ssm.com.my/Pages/Legal_Framework/Document/Act%20777%20Reprint.pdf

Highlight: Distribution out of profit

131. (1) Subject to section 132, a company may only make a distribution to the shareholders out of profits of the company available if the company is solvent.(2) The company, every officer and any other person or individual who contravene this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding three million ringgit or to both.

Duties and responsibilities of directors:

213. (1) A director of a company shall at all times exercise his powers in accordance with this Act, for a proper purpose and in good faith in the best interest of the company. (2) A director of a company shall exercise reasonable care, skill and diligence with— (a) the knowledge, skill and experience which may reasonably be expected of a director having the same responsibilities; and (b) any additional knowledge, skill and experience which the director in fact has. (3) A director who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding three million ringgit or to both.

  1. Bursa Malaysia, which only has its listing requirements to rely on, and which in turn largely relates to breach of disclosure of information offence:http://www.bursamalaysia.com/misc/system/assets/5949/MAIN_Chap9_ETF(2Jan19).pdf

 

  1. SC  relay on CAPITAL MARKETS AND SERVICES ACT 2007 to act: https://www.sc.com.my/api/documentms/download.ashx?id=2093f82c-7929-47e8-9279-f88e3b85dbbf

Highlight: Penalty for offence under Subdivision 1– Offences relating to false trading and market rigging, stock market manipulation, etc

182. A person who contravenes section 175, 176, 177, 178, 179 or 181 commits an offence and shall be punished on conviction to imprisonment for a term not exceeding ten years and to a fine of not less than one million ringgit.

  • 175. False trading and market rigging transaction
  • 176. Stock market manipulations
  • 177. False or misleading statements, etc.
  • 178. Fraudulently inducing persons to deal in securities
  • 179. Use of manipulative and deceptive devices
  • 181. Dissemination of information about illegal transactions

Penalty for offence under Subdivision 2– Offences relating to Insider trading

188. (4) A person who contravenes subsection (2) or (3) Prohibited conduct of person in possession of inside information commits an offence and shall be punished on conviction to imprisonment for a term not exceeding ten years and to a fine of not less than one million ringgit

Subdivision 3 – Civil remedies

  • 199. Civil liability for contravention of section 175, 176, 177, 178, 179 or 181
  • 200. Civil action by Commission
  • 201. Recovery of loss or damages

Prohibited conduct of director or officer of a listed corporation: Bleaches of fiduciary duties of directors

317A. (1)A director or an officer of a listed corporation or any of its related corporations shall not do or cause anyone to do anything with the intention of causing wrongful loss to the listed corporation or any of its related corporations irrespective of whether the conduct causes actual wrongful loss.

(2) This section is in addition to and not in derogation of any law relating to the duties or liabilities of directors or officers of a listed corporation.

(3) A person who contravenes subsection (1) commits an offence and shall, on conviction, be punished with imprisonment for a term which shall not be less than two years but not exceeding ten years and be liable to a fine not exceeding ten million ringgit.

 

How our legal systems work?

Our Legislature enacts the law.

Our Executive varies branches investigate and prepare the investigation paper and submit the investigation paper to A-G. A-G was given absolute power under Article 145(3) at his discretion to institute, conduct legal proceeding against or discontinue any proceedings for an offence in court of law.

Judiciary: Our Judges then uphold the law in court trial (time consuming trial base on innocent until proved guilty thro’ Magistrate Court, Sessions Court, High court, Court of Appeal, the Federal Court then finally pardon board/royal pardon) base on crime evidence/arguments and defend counter evidence/arguments by prosecutors and defense lawyers as of offences per the enacted law/penal code.

At each stage those with wealth will have the mean to buy influence from those in power to influence the outcome. So is justices served? Are societies at faults for the current affair of kowtowing to the rich and powerful but punishing the poor severely for petty crime? Are we with knowledge but because of our vested interest allowing the CEO/Pump & Dumpers to get away with crime as long as we benefit from it too?

https://www.thestar.com.my/business/business-news/2010/10/30/the-lack-of-deterrent-sentencing/

https://www.thestar.com.my/business/business-news/2010/10/30/does-whitecollar-crime-pay/

https://www.thestar.com.my/business/business-news/2010/07/03/getting-away-with-white-collar-crime/

https://www.thestar.com.my/news/nation/2014/02/17/rm178bil-and-counting-lost-through-scams-white-collar-crimes-raking-in-billions/

https://www.thestar.com.my/business/business-news/2011/01/15/a-glimmer-of-hope/

https://issuance.sc.com.my/wp-content/uploads/eng/html/resources/annual/ar2017_eng/scar2017_eng_.pdf

In 2017, the SC charged a total of 10 individuals in the Sessions Court. Of this number, 7 individuals were charged for insider trading, 2 individuals for carrying out regulated activities without licence and 1 individual for failure to assist in SC’s investigation.

Page177: Cases currently pending in courts

  • Sessions Court: 31
  • High Court (Criminal): 12
  • High Court (Civil): 13
  • Court of Appeal:  5
  • Federal Court: 2
  • Total: 63

Thank you.

P/S: To whom interest in learning how to invest, you can refer to to below link by Mr. KCChong:

Posted by kcchongnz > Jan 30, 2019 09:57 PM

Posted by Holycow > Jan 30, 2019 05:57 PM | Report Abuse
hi kc,i agree to your blog. But question, may i know how to calculate whether the company stock is undervalue? or correspond to your margin of safety ?
First look at whether it is a good company,
https://klse.i3investor.com/blogs/kcchongnz/161473.jsp
Here you can see the difference of a good company and a bad one.
Next, do some simple valuations. Without a valuation, it is hard to decide if a price offer is worth taking,
https://klse.i3investor.com/blogs/kcchongnz/162226.jsp
There are various valuation technique to be used as shown in the above link.
The above two is generally good enough to decide whether to invest in a stock or not.
Then if you want to dig deeper into margin of safety, try reading and learn up the stuff as shown in the stuff below.
https://klse.i3investor.com/blogs/kcchongnz/166106.jsp
This last one is harder but not insurmountable if you certain level of skill. But it is not utmost essential to be successful in investing. It is like another wedge in your golf bag.

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qqq3 in a capitalist place, as in Malaysia, in UK and in USA, laws are written by the rich for protecting the the properties of the rich against the non rich ......white collar crimes are the only ones the rich may commit in their ordinary business, so for this the laws will have to be written in such a way.......it is difficult to prosecute...........and punishment , if any will not be too harsh..........cannot be too harsh on fellow capitalists......

steal $ 1...that is 10 years....steal $ 10 billion ...that is 5 years maximum....
07/02/2019 18:56
speakup please dont hang Koon.
kesian him. old already, kasi him chan lah
08/02/2019 09:13


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