SC enters RM31m settlement in Swisscash scam

Thursday, November 12, 2009

KUALA LUMPUR, Nov 14 — The Securities Commission (SC) has entered into a RM31 million settlement in the Swisscash investment scam, the record payout for the restitution of eligible investors who suffered losses in the Ponzi scheme.

The largest payout in the SC’s history was made possible following a consent judgment entered into with two Swisscash defendants, Albert Lee Kee Sien and Amir Hassan, its chairman Tan Sri Zarinah Anwar said at a press conference yesterday.

Zarinah described the “milestone payment” as a very significant achievement not only because of the magnitude of the payout but also the scale and scope of the scam which had affected thousands of investors — the bulk from Malaysia — had prompted painstaking cross-border investigations and legal actions spanning seven jurisdictions, including Singapore, over the past three years.

The recovery notwithstanding, Zarinah stressed that Swisscash was an exception and that investors in illegal schemes could not “as a matter of course, expect the regulators to get their money back for them”.

Indeed, investors who are successful in getting a restitution are fortunate given the elaborate scam by the Malaysian masterminds who went to great lengths to establish set-ups in a number of jurisdictions in an attempt to appear legitimate. “The site had every feature of an investment,” observed SC senior general manager, general counsel Foo Lee Mei who estimated that “a hundred-odd investors” were from Singapore.

The commission initiated civil proceedings in the High Court against Lee, Kelvin Choo Mun Hoe and Dynamic Revolution Sdn Bhd and last September, the court ordered them to pay US$83 million (RM280.62 million) — the estimate of total investments in the scam. The SC then obtained a worldwide Mareeva injunction restraining the defendants from disposing of their assets.

More than 3,000 people have lodged complaints alleging losses with the SC which continues to receive claims and which estimated the total amount invested in excess of RM31 million.

Swisscash had promised extremely attractive returns of 300 per cent over 15 months. Out of every five investors, four were professional males, observed Zarinah, the rest “housewives, teachers, your typical uncles and aunties”. The largest sum invested was several million ringgit.

Swisscash investors must produce some documentary evidence of their investments to be eligible for compensation, at the earliest next year after a court-approved distribution plan. However, those who were also recruiters or upliners would not be considered for compensation. The SC plans to publish a notice setting out the process for investors yet to register their claims.

The SC began receiving enquiries about Swisscash in 2006 and Zarinah said that if not for the assistance of the Malaysian Communications and Multimedia Commission and Cybersecurity in blocking the Swisscash site in June 2007, there might have been more victims.

Prior to Swisscash, the commission’s biggest settlement was RM2 million and related to a case of insider trading in rice distributor Bernas.

Read More @ The Malaysian Insider

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