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Asiasons, Blumont, Liongold saga: MAS, CAD investigate SFA breaches

MAS and CAD investigate possible breaches of SFA (Chapter 289)

The story of Asiasons, Blumont and Liongold moved to a new chapter last week when Monetary Authority of Singapore (MAS) and Commercial Affairs Department (CAD) of the Singapore Police Force announced that they are investigating possible breaches of the Securities and Futures Act (SFA). The Securities and Futures Act is an Act relating to the regulation of activities and institutions in the securities, futures and derivatives business.

Singapore, 2 April 2014… The Commercial Affairs Department (CAD) of the Singapore Police Force has commenced an investigation into possible breaches of the Securities and Futures Act (Cap. 289) arising from suspected trading irregularities in the shares of Asiasons Capital Limited, Blumont Group Ltd and LionGold Corp Ltd. CAD is working jointly with the Monetary Authority of Singapore in the investigation.

 

Technical picture of Asiasons, Blumont and Liongold

We first discussed the technical analysis of Asiasons, Blumont and Liongold where we said that all three are dangerous, that investors should not catch a falling knife.

Since then

  1. Asiasons and Blumont are currently near or at 52-week low
  2. There is heavier than usual trading activity in Blumont
  3. Volume spike in Liongold

These are very negative signs that investors need to take note of. 52-week low is a psychological level and critical support. Stocks that are hovering at or making new 52-week lows are usually avoided by investors because they are likely to trend lower. Heavy trading volume in a stock that is falling deeply and/or at 52-week low is an ominous sign which is discussed in the story ‘High volume exposed: Four killer scenarios that stock traders should care about‘.

Asiasons Blumont Liongold stock charts

Until there is a fundamental change in the management structure of these three companies and/or a turnaround in their business models, there is no reason to buy these stocks. Technically, a bullish reversal pattern should be in place before investors consider.

 

UPDATE 14 APRIL 2014 – Profound impact on share investing community

The 2013 penny stock crash involving Asiasons, Blumont and Liongold continue to make itself felt. I wonder when we will ever see the extent of losses not just in monetary but in human terms as well.

Singapore broker sues former client over losses

From The Straits Times, Thursday 10 April 2014

 

UPDATE 05 August 2014 – Consequences of saga

  1. Investors, traders that were deeply hurt on both sides of Causeway
  2. Egg-on-face, many questions for management of all three companies as well as the role of Goldman Sachs (Goldman Sachs sued, sues customers)
  3. Exodus of stockbrokers from the business and a 40% slump in trading volume early 2014.

This penny stock crash may be a major contributing factor to reforms by MAS-SGX announced on 01 August 2014.

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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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