Justice Lee Swee Seng, in delivering the decision on a lawyer’s appeal to set aside a lower court’s decision on insider trading, said there was nothing “unconstitutional” about the Securities Commission’s lawsuit against E Sreesanthan.
The court said the law on which the suit was based, the Capital Markets and Services Act, did not spell out the need for the attorney-general’s consent.
“One cannot imply or impute the need for prior consent with the effect that the whole proceeding becomes null and void.
“That the same ingredients of an offence have to be proven in the civil action on a balance of probabilities does not equate to requiring the consent of the attorney-general as required in a criminal prosecution,” Lee said in his judgment dismissing Sreesanthan’s appeal.
Other judges who sat with him were Justices Hashim Hamzah and M Gunalan.
The High Court had held Sreesanthan liable for insider trading and ordered him to pay RM1.99 million – three times the sum he gained.
He was also told to pay RM1 million in civil penalties and barred from holding the directorships of public-listed companies for a period of 10 years, effective November 2020.
However, the Federal Court in April granted an application by Sreesanthan to obtain leave to pursue his appeal against the decision of the High Court that found him to have engaged in insider trading of Worldwide Holdings Bhd shares in 2006.
It was allowed unanimously by the court’s three-panel judges comprising Chief Justice Tengku Maimun Tuan Mat, Chief Judge of Sabah and Sarawak Abdul Rahman Sebli and Federal Court judge Nordin Hassan
Lee also said that a civil lawsuit was different from criminal prosecution.
He said when individuals are found guilty, they may need to serve their jail sentences if the law requires, with a conviction recorded against them.
“A civil action would at best result in a civil penalty for which there is no criminal sanction or punishment.
“There is no record of a conviction in a civil action,” Lee said, adding that a judgment debtor would not need to serve time in jail if he or she failed to pay.