In a speech at the Federation of Investment Managers Malaysia’s 30th anniversary dinner here last night, Awang took aim at fraudulent unit trust consultants (UTCs), saying the SC would not hesitate to take criminal action.
“Although the numbers are small, the fact that such behaviour is there at all speaks to the need to monitor UTCs even more closely and make principal firms more accountable,” he said.
He said the SC would enforce stronger supervisory action against intermediaries lacking proper internal controls, and that principal firms are responsible for monitoring and supervising their UTCs.
“If bad behaviour is detected, the principal firm needs to own up to it and be held responsible, including refunding or compensating the aggrieved investors. This is especially so where there are internal control failures on the part of the principal firm.
“You need to have the right processes and procedures in place to monitor and supervise these UTCs.
“This is not only to protect legitimate investments but also to prevent illegal activities such as money laundering.”
Earlier this year, the Malaysian Reserve reported that FIMM had taken action against three unit trust schemes and private retirement scheme consultants for breaching its code of ethics and rules of professional conduct.
The consultants involved were Rohaizan A Karim from Kenanga Investors Bhd, and Yusof Saari and Romy Eaduka from Bank Kerjasama Rakyat Malaysia Bhd.
Rohaizan was found to have provided false information on her academic qualifications during the registration process with FIMM, while Yusof was found guilty of providing fake unit trust statements to individuals in 2017.
Romy faced multiple charges, including investing a substantial sum of an investor’s money without authorisation and conducting unauthorised transactions, resulting in significant financial losses. He also failed to provide proper explanations and adhere to investment guidelines.
FIMM subsequently barred Rohaizan from registration for two years, while Yusof was barred for three years and required to undergo training on anti-money laundering and FIMM’s code of ethics if he chose to re-register.
Romy was permanently barred from registration.