Former investment banker sentenced to two years in prison and fined RM1 million for securities fraud

A former investment banker, Ruwan Amaresh Shaun Ponniah, has been sentenced to two years in prison and fined RM1 million for engaging in securities fraud. This verdict was handed down by Kuala Lumpur sessions court judge Norma Ismail after Ruwan pleaded guilty to one count of investment fraud under Section 179(b) of the Capital Markets and Services Act 2007 (CMSA). The Securities Commission Malaysia (SC) confirmed that the court took into account nine additional charges under the same section of the CMSA.

Ruwan, who previously held the position of associate director of debt capital markets at CIMB Investment Bank, was apprehended and charged by the SC in September with a total of eleven charges under the CMSA. Among these charges was one related to conducting fund management activities without the necessary license. The court’s verdict entailed a two-year jail sentence, with the directive that this term would run concurrently with the initial charge. In the event that Ruwan is unable to pay the RM1 million fine imposed on him, he will be obligated to serve an extra six months behind bars.

The SC outlined the fraudulent activities carried out by Ruwan, detailing how he deceitfully assured seven investors that he would invest their funds in shares listed on both local and international stock exchanges. However, instead of investing the money as promised, Ruwan diverted the funds for other undisclosed purposes without the investors’ knowledge. These illicit activities transpired between October 2018 and June 2020.

Ruwan’s decision to plead guilty was part of an application for a plea bargain under Section 172C of the Criminal Procedure Code. Initially, he had opted to contest all charges but was granted bail of RM210,000 and subsequently requested a reduction in bail amount, which was lowered to RM105,000. However, due to an inability to pay the bail, Ruwan has been in police custody at Sungai Buloh prison.

This case serves as a stark reminder of the consequences that individuals engaging in securities fraud face. The deliberate manipulation and misrepresentation of investors’ funds not only violate established laws and regulations but also erode trust in financial institutions and professionals. The sentencing of Ruwan Amaresh Shaun Ponniah exemplifies the commitment of regulatory bodies like the SC to uphold the integrity and fairness of the financial markets. Such actions are essential in deterring fraudulent practices and safeguarding the interests of investors and the broader economy.