Swisscash scam: SC secures RM31m settlement

KUALA LUMPUR: The Securities Commission (SC) has entered into the largest settlement in its history involving RM31 million over the Swisscash investment scam and it will use the money recovered to restitute eligible investors affected by the investment scam, said SC chairman Tan Sri Zarinah Anwar.
The payment is made possible following a consent judgment entered on Nov 6, 2009, with two Swisscash defendants, Albert Lee Kee Sien and Amir Hassan. This marked the SC's three-year investigations, including cross border, to pursue the mastermind of the Swisscash scam in Malaysia.

“It had affected thousands of investors and prompted painstaking cross-border investigations and legal jurisdictions over more than three years. So far, 3,000 people have lodged complaints to the SC alleging losses,” she said at a press conference on Nov 13. The investors were Malaysians and some foreigners.
Zarinah said the first batch of payments was expected to be made early next year. However,  there would be several stages involved, including submitting the criteria for investors' eligibility to court, appointing an administrator and also placing of advertisements in newspapers.

"But not all (complaints) will be entertained. Investors must show proof of their investments,” she said adding investors who were also "recruiters or upliners in the scam will not be considered for compensation". Investor which invested in Swisscash after the SC issued the warning on Nov 5, 2006 might also find difficulties in securing compensation.

Investors would only be compensated based on the amount of their initial investment, without any profits. The SC would also soon publish a notice, setting out the process for Swisscash investors yet to register their claims.

Zarinah stressed investors in illegal scams could not expect the regulators to help regain their their investments, pointing out Swisscash was an exception as the funds were recovered by SC’s effort and close cooperation and support from SC’s counterpart in various countries.
To recap, since 2006, the SC had been receiving queries about Swisscash from the public since 2006. Upon discovering SwissCash was a form of pyramid scam, SC took down the website in 2007 with the cooperation from Malaysian Communications and Multimedia Commission (MCMC) and Cybersecurity.
“The assistance rendered by the MCMC and Cybersecurity were instrumental in helping us identify and block access to the SwissCash-related website by the Malaysian public,” Zarinah said, adding that prior to the website closure, SC had been issuing warning to investors.

The four Swisscash-related websites which the SC had blocked -- www.swisscash.net, www.swisscash.biz, www.swissmutualfund.biz and www.swisscashguide.com.

On June 18, 2007,  the SC filed a civil suit at the Kuala Lumpur High Court against Albert Lee and six others involved in the Swisscash scam operated over the internet.  In the same month, SC obtained a World Wide Mareva injunction to prevent all defendants from disposing their assets.
By September, one of the defendants, Amir Hassan was ordered to transfer RM12.5 million from overseas bank accounts back to Malaysia and in November, the SC succeeded in entering into consent order with Albert and Amir for a total sum of RM30 million.

Asked on the profile of investors that were duped in the scam, Zarinah said it was surprising as 80% were professionals, male, and the rest housewives, teachers and older people. She said that same investors had even invested “in the region of several millions (ringgit)”.

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Swisscash victims to get back part of their money

KUALA LUMPUR: Investors in the Swisscash Internet-based investment scam will now be able to get back part of their money following a consent judgment the Securities Commission (SC) entered into with two of the defendants in the case for a sum of RM31mil.

The SC said in a press release that the Swisscash scam involved an estimated total amount of US$83mil, which was what the Kuala Lumpur High Court ordered Albert Lee Kee Sien, Kelvin Choo Mun Hoe and Dynamic Revolution Sdn Bhd to pay in a judgment on Sept 25 last year.
According to SC chairman Tan Sri Zarinah Anwar, the SC entered into a consent judgement with Lee and Amir Hassan for the settlement sum.

She said the settlement was the largest ever in the history of the prosecution of such scams, which affected thousands of investors globally and prompted cross-border investigations involving seven other jurisdictions.
The previous largest settlement amount under the SC’s jurisdiction was RM2mil for insider trading in Padiberas Nasional Bhd, which was also distributed to affected investors.

“This is a milestone payout which is made possible following a consent judgment entered into with two of the Swisscash defendants,” Zarinah said, adding that the restitution would be based on a court-sanctioned distribution plan.

She told a media briefing yesterday that investors in illegal schemes could not expect regulators to get their money back for them as a matter of course. “Swisscash is an exception, in this case the recovery was only made possible not just by extremely painstaking efforts on our part but also by the close cooperation and support that we’ve been receiving from our counterparts in the various countries,” Zarinah said.

She said investors would have to show sufficient documentary proof of their principal investment and must not have been involved as recruiters in the scam. Investors who profited from their initial investment and still made claims would have their profits deducted from the claim sum while other criteria for consideration included whether investors heed the warnings by authorities before investing.

Zarinah said the first batch of restitution payments would be made early next year following approval from the court. She said 80% of the investors were male professionals and the profile was “not so typical of this kind of scam”.

She said to-date, there were 3,000 complaints filed against the scam.

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