Attention! Lending a stock trading account to another person can be fined up to RM3 million or imprisoned for up to 10 years!
The recent incident of the Chief Commissioner of the Anti-Corruption Commission lending a stock trading account to his younger brother is getting more and more heated, and this has brought attention to the legality of using another person’s account for stock trading.
It is understood that borrowing another person’s stock trading account for stock trading may violate Section 25(4) of the Securities Industry (Central Depository) Act 1991. Under this Act, any securities account opened must be opened in the name of the beneficiary or an authorized agent.
Any person who contravenes Section 25 may be liable to a fine not exceeding RM3 million or imprisonment for a term not exceeding 10 years or both. The Securities Commission of Malaysia is cracking down on violations of Section 25(4).
The use of another person’s account to trade stocks on the Malaysian Stock Exchange is not new. Many people use it to hide their wealth or engage in insider trading. In May 2011, a person was fined RM25,000 for lending a stock trading account.
