Examining the Parity Principle in Criminal Sentencing

Transcription

1 Examining the Parity Principle in Criminal Sentencing Introduction Under the parity principle, offenders participating in the same offence should generally incur similar criminal sentences. In the case of PP v Ng Sae Kiat [2015] SGHC 191, the High Court had the opportunity to consider the scope and operation of the parity principle. Notably, the effect of the principle in this case was to avoid a custodial sentence being imposed on a group of individuals, instead maintaining a monetary fine. The four Respondent traders had faced charges under s 201(b) read with s 204(1) of the Securities and Futures Act ( SFA ) for accepting certain trades using nominee accounts through a loophole in their employer s trading system. This loophole had been brought to their attention by one Vincent Tan ( Vincent ), who faced similar charges. Before the District Court, all parties were sentenced to fines of varying amounts. The Prosecution appealed against the Respondents sentence, arguing for custodial sentences, but did not appeal against Vincent s sentence. The High Court found that the Respondents conduct did in fact warrant custodial sentences. However, as the Respondents moral culpability was not significantly different from Vincent s, there should be parity in their sentences. Therefore, the Court declined to impose custodial sentences on the Respondents. The Respondents were successfully represented in this matter by Hamidul Haq, Thong Chee Kun, Istyana Ibrahim and Josephine Chee of Rajah & Tann Singapore LLP. Brief Facts The four Respondents, along with Vincent, were employed as Contracts for Differences ( CFD ) Hedgers for Phillip Securities Pte Ltd ( PSPL ). Vincent had discovered a loophole in the PSPL s CFD system, and subsequently alerted the Respondents to this loophole. Vincent and the Respondents then began accepting out of market CFD trades on behalf of PSPL. These trades were initiated using nominee accounts belonging to their friends and relatives. Vincent and the Respondents were eventually charged under s201(b) of the SFA for practicing fraud or deception in connection with the subscription, purchase or sale of any securities, and all five individuals pleaded guilty. The District Court sentenced them to varying monetary fines. The Prosecution then appealed against the Respondents sentences, arguing that their conduct warranted custodial sentences instead. However, the Prosecution did not appeal Vincent s sentence, believing him to be of lower moral culpability than the Respondents. The High Court thus had to determine whether custodial sentences were warranted and, if so, whether the parity principle nonetheless applied to keep the Respondents sentences in parity with Vincent s sentence (i.e. monetary fines). A Court of three Judges heard the matter. The Court also appointed an amicus curiae and the Law Society to assist the court. Holding of the High Court Upon an examination of the facts of the case, the Court found that the Respondents conduct was sufficiently aggravating to warrant custodial sentences. However, the Court declined to interfere with the monetary fines imposed by the District Court due to the principle of parity. 1

2 The Court held that the parity principle applied in the circumstances, and that Vincent and the Respondents were not of significantly different moral culpability. Therefore, there should be parity in the sentences imposed on them. Scope of parity principle The Court first had to consider the scope of the parity principle, and whether it only applied to cases where the co-offenders were involved in the same transaction and charged for the same offence. The Court held that the parity principle has a wider scope, and can apply for the purpose of sentencing offenders who do not participate in the same act constituting the offence but who, as a matter of substance, can be said to be participants in a common criminal enterprise. Here, all the Respondents employed the scheme that Vincent had instructed them in and had himself used. This was sufficient to make them all participants in a common criminal enterprise, and thus subject their sentences to the parity principle. Moral culpability Since the parity principle applied in the circumstances, the Court would seek to maintain parity in the sentences imposed on Vincent and the Respondents unless there were any factors or personal circumstances that could distinguish Vincent s level of moral guilt from that of the Respondents. The Court rejected the Prosecution s submission that the Respondents were of a higher moral culpability than Vincent. Importantly, although the Respondents did not take their lead and cue every step of the way from Vincent, Vincent had in fact supplied them with the modus operandi to defraud PSPL. The Court also declined to assign too much weight to the fact that Vincent had conducted fewer out of market trades and used fewer nominee accounts, as this was due to the fact that he had been earlier transferred out of the CFD team. Further, there was no evidence that Vincent had removed himself from the CFD team out of guilt over his actions. Effect of parity principle Although the parity principle called for parity in the sentences passed on Vincent and the Respondents, the Court still had to consider whether to exercise its discretion to enhance a sentence it considers manifestly inadequate. The Court s discretion was not fettered by the application of the parity principle but, in any event, the Court declined to exercise such discretion in the circumstances. While the Court had indicated its view that custodial sentences were ordinarily warranted where employees in a financial institute abuse the duty of fidelity owed to their employer in a premeditated and brazen manner, over a period of time, for personal gains, it also noted that there had been no relevant sentencing precedents involving the commission of an offence of the same nature as that committed by the Respondents apart from that passed on Vincent. The Respondents would thus have been justified in expecting themselves to be treated in a manner similar to Vincent when they pleaded guilty. Therefore, the Court elected not to interfere with the District Court s decision, and declined to impose custodial sentences on the Respondents. 2

3 Concluding Words While the parity principle often serves as a guide for imposing sentences on co-offenders, in this case, the principle effectively rescued the Respondents from custodial sentences. The High Court was prepared to find that custodial sentences were appropriate in the circumstances, but declined to raise the sentences from monetary fines in the interest of parity and consistency in sentencing. In addition, the High Court also set out a non-exhaustive list of factors to consider in determining whether the custodial threshold would be crossed in respect of a s 201(b) offence, which would include: (i) (ii) (iii) (iv) (v) (vi) (vii) the extent of the loss/damage caused to victim(s); sophistication of the fraud; the frequency and duration of the offender s unauthorised use of the relevant account; extent of distortion, if any, to the operation of the financial market; the identity of the defrauded party (ie, whether the defrauded party is a public investor or a securities firm); relationship between the offender and the defrauded party; and the offender s breach of any duty of fidelity that may be owed to the defrauded party. Parties wishing to consult on SFA offences, sentencing, or other issues of criminal law may contact our team below. 3

4 Contacts Hamidul Haq Partner D (65) F (65) hamidul.haq@rajahtann.com Thong Chee Kun Partner D (65) F (65) chee.kun.thong@rajahtann.com Istyana Putri Ibrahim Senior Associate D (65) F (65) istyana.ibrahim@rajahtann.com Josephine Chee Associate D (65) F (65) josephine.chee@rajahtann.com Please feel free to also contact Knowledge and Risk Management at eoasis@rajahtann.com ASEAN Economic Community Portal Ahead of the launch of the ASEAN Economic Community ( AEC ) in December this year, businesses looking to tap the opportunities presented by the integrated markets of the AEC can now get help a click away. Rajah & Tann Asia, United Overseas Bank and RSM Chio Lim Stone Forest, have teamed up to launch Business in ASEAN, a portal that provides companies with a single platform that helps businesses navigate the complexities of setting up operations in ASEAN. By tapping into the professional knowledge and resources of the three organisations through this portal, small- and medium-sized enterprises across the 10-member economic grouping can equip themselves with the tools and knowhow to navigate ASEAN s business landscape. Of particular interest to businesses is the "Ask a Question" feature of the portal which enables companies to pose questions to the three organisations which have an extensive network in the region. The portal can be accessed at 4

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