Why were Su Eng Kooi and Yap Choong Seong found guilty of unlicensed derivatives trading?

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Su Eng Kooi and Yap Choong Seong Found Guilty for Unlicensed Capital Market Activities

Su Eng Kooi and Yap Choong Seong were found guilty of carrying on unlicensed regulated capital market activities due to their involvement in the operations of Jalatama Management Sdn Bhd. Specifically, they were responsible for the company's trading of futures contracts and dealing in derivatives without possessing the necessary Capital Markets Services Licence. As officers of Jalatama, they were deemed to have committed these offences between July 2011 and September 2013.
Offences Under Capital Markets and Services Act 2007

The charges brought against Su Eng Kooi and Yap Choong Seong were under Section 58(1) of the Capital Markets and Services Act 2007 (CMSA), read in conjunction with Section 367(1) of the same Act. These sections pertain to the prohibition of carrying on regulated activities without a licence. The prosecution successfully argued that Jalatama Management Sdn Bhd engaged in the business of trading futures contracts and dealing in derivatives, which are regulated activities requiring specific authorisation from the Securities Commission Malaysia.
Role as Officers of Jalatama Management Sdn Bhd

Both Su Eng Kooi and Yap Choong Seong were identified as officers of Jalatama Management Sdn Bhd during the period when the unlicensed activities took place. The law, as applied in this case, holds individuals in such positions accountable for the company's non-compliance with regulatory requirements. Their roles meant they were overseeing or involved in the operations that constituted dealing in derivatives without the requisite licence, thereby making them liable for the offences.
Conviction and Sentencing by Sessions Court

Following a full trial, the Sessions Court found both Su Eng Kooi and Yap Choong Seong guilty on December 12, 2022. The court imposed a sentence of one year's imprisonment and a fine of RM1 million each. Additionally, a further one-year jail term was stipulated in default of payment of the fine. This conviction and sentencing underscored the seriousness with which such regulatory breaches are treated within the Malaysian capital market framework.

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Why were Su Eng Kooi and Yap Choong Seong found guilty of unlicensed derivatives trading?

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