Malaysia Securities Commission secures Federal Court affirmation of Worldwide Holdings insider trading civil judgment and MYR 100,000 costs award

Malaysia Securities Commission (SC) reported that Malaysia’s Federal Court has unanimously upheld earlier rulings in the SC’s civil insider trading action involving Worldwide Holdings Berhad shares, dismissing Dato’ Sreesanthan Eliathamby’s appeal and ordering him to pay MYR 100,000 in costs. The apex court confirmed that Section 89E(1) of the Securities Industry Act 1983 (now Section 188(1) of the Capital Markets and Services Act 2007) is not a strict liability provision and requires that a person knows or ought reasonably to know the information is not generally available. It also held that materiality is not confined to circumstances at the time of the impugned acquisition and may take into account subsequent facts, and that the Attorney General’s power under Article 145(3) of the Federal Constitution to institute proceedings for an offence does not extend to civil actions brought by the SC under Section 90A(5) of the SIA. The case concerned the acquisition of 600,000 Worldwide shares between 7 June and 11 July 2006 while in possession of non-public information about a proposed privatisation by Perbadanan Kemajuan Negeri Selangor, with the High Court ordering payment of MYR 1,989,402 (three times the profits gained) and a MYR 1,000,000 civil penalty, plus a ten-year director disqualification from 18 November 2020; with costs awarded across the courts, the total amount ordered payable to the SC is MYR 3,239,402.