| Summary: | Purpose – This paper aims to chart the enforcement actions taken by the Malaysian regulatory
authorities in relation to illegal investment schemes in Malaysia, and clarifies the various strategies
adopted by the Malaysian regulatory authorities to ensure protection of investors in the capital market.
The enforcement actions relate to the Swisscash scheme as well as commodities futures involving crude
palm oil and a more recent case involving gold futures. These schemes share similar characteristics with
Ponzi schemes that were thrust into the international limelight in the notorious Madoff Ponzi scheme
and its allegation of regulatory failure.
Design/methodology/approach – The paper clarifies, by way of case study, public enforcement of
illegal investment schemes promoted through the Internet and schemes involving cross-border
investments.
Findings – The enforcement powers of the regulatory authorities in Malaysia are being utilized to
ensure compliance with the law. The enforcement actions by the regulatory authorities in the
afore-stated cases are significant in view of the successful custodial sentence of imprisonment, the
regulators’ public enforcement action intended to compensate investors and the most recent case which
is unfolding, due to the large number of alleged perpetrators and significant wealth transfer involved.
Originality/value – Given the allegation of regulatory failure in other jurisdictions, this paper enables
a view to be formulated of the timeliness and appropriateness of the enforcement actions.
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