The Monetary Authority of Singapore (MAS) said in a statement the case involved shares of Sumitomo Mitsui Financial Group Inc. (SMFG) listed on the Tokyo Stock Exchange, the Osaka Stock Exchange and the Nagoya Stock Exchange.

The fines were described as a "civil penalty" for breaches of insider trading provisions under Singapore's Securities and Futures Act (SFA), and did not amount to criminal action.

The GIC, one of two main investment arms of the Singapore government, handles foreign reserves of more than US$100 billion. It invests funds in financial markets and prime real estate in major capital cities.

MAS launched an investigation after being alerted by Japan's Financial Services Agency and the Securities and Exchange Surveillance Commission.

MAS investigations found that in February 2003 the three GIC employees used "non-public material price sensitive information" concerning a proposed offering of convertible preferred shares by SMFG, the MAS statement said.

SMFG share prices fell after the announcement of the proposed offering and the sale of SMFG shares resulted in gains, through losses avoided, of about 710,000 dollars for the GIC, it said.

The gains were "not retained by the GIC employees concerned," the MAS added.

Investigations showed the GIC itself did not commit any breach but it volunteered to give a sum of about $710,000 to the MAS, with the three employees paying sums ranging from $75,000 and $400,000.

"MAS will use this to fund additional consumer financial education programmes," the statement said.

"Insider trading and other market misconduct undermines the confidence of investors in the integrity of our capital markets," said Shane Tregillis, MAS assistant managing director for market conduct.

A spokesman for the MAS could not immediately comment when asked whether the three penalised employees were still working for the GIC.

Apart from the GIC, Singapore's other state investment arm is Temasek Holdings, which controls companies like Singapore Airlines and Singapore Telecommunications.

The MAS said a civil penalty action "is not a criminal action and does not attract criminal sanctions.

"The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004," it added.

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