Brothers Face RM10 Million Fine for Unlicensed Securities Dealing

Three brothers stood before separate Kuala Lumpur Sessions Courts recently, after the Securities Commission Malaysia charged them with operating an unlicensed securities dealing business.

The Securities Commission charged Anuar Hassan, Mohd Amin Hassan, and Amir Hassan for offences relating to unlicensed capital market activities. The charges stem from alleged conduct spanning several states and more than half a year of operations.

In total, the three brothers were slapped with eight charges of the same offence, allegedly committed between March 2019 and October 2019 in Kuala Lumpur, Putrajaya, Selangor, and Johor. They claimed trial before judges Norma Ismail, Azrul Darus, and Surita Budin.

The charges were distributed across the three accused in a layered fashion. Before Sessions Court Judge Norma binti Ismail, Mohd Amin Hassan faced one charge under Section 58(1) of the Capital Markets and Services Act 2007 for carrying on a business of dealing in securities without a Capital Markets Services Licence. Anuar Hassan and Amir Hassan separately faced two charges jointly under the same section, read together with Section 34 of the Penal Code. The inclusion of Section 34 which addresses acts committed in furtherance of a common intention suggesting the prosecution intends to establish a coordinated scheme rather than isolated individual conduct.

All three brothers were each granted bail of RM30,000 with two sureties, and were imposed with additional bail conditions requiring them to surrender their passports to the court and report monthly to the SC's investigating officer. The conditions reflect the seriousness with which the regulator is treating the matter, particularly given the cross-state nature of the alleged activities.

The charges were filed under Section 58(1) of the Capital Markets and Services Act, which provides for a maximum fine of RM10 million, up to 10 years in prison, or both, upon conviction. The penalties represent one of the more severe enforcement thresholds within Malaysia's capital markets framework, and their presence signals that the SC views unlicensed securities dealing not as a regulatory technicality but as a substantive threat to market integrity.

The SC has consistently reiterated its position on this front. The commission stated that dealing in securities is a regulated activity under Schedule 2 of the Capital Markets and Services Act, and that any person carrying out this regulated activity must be licensed by the SC. It further reminded the public to exercise caution before committing funds to any investment opportunity, reaffirming the regulator's dual mandate of enforcement and investor education.

The SC also urged investors to remain vigilant and to verify the legitimacy of any investment opportunity before parting with their money. The reminder carries added weight given that unlicensed operators frequently market themselves with a veneer of credibility, making due diligence all the more critical for retail participants.

The case mirrors the vulnerability in Malaysia's investment landscape: the ease with which unlicensed individuals can attract capital from unsuspecting members of the public, particularly those unfamiliar with licensing requirements under the CMSA. Securities dealing, by its very nature, involves significant financial stakes, and when conducted outside the regulatory perimeter, it strips investors of the protections that licensed intermediaries are obligated to provide.

For Malaysian investors, this case is a timely reminder that the presence of a licence is not a formality but a legal safeguard. Before engaging any party who offers to manage, trade, or deal in securities on your behalf, investors are encouraged to verify their status directly through the SC's official licensing register at sc.com.my. The consequences of trusting an unlicensed operator can be severe and, in many cases, irreversible which is a lesson the Hassan brothers' case has put squarely in the public eye.