SINGAPORE (May 13): Esther Seet, executive director of brokerage firm Lim & Tan Securities, reckoned "on hindsight" restrictions imposed by the Singapore Exchange on stocks of Blumont Group, Asiasons Capital (now known as Attilan Group) and LionGold Corp (BAL) could have caused the 2013 penny stocks crash.

During cross-examination in the trial of the alleged masterminds of the crash on Monday, Seet agreed with Senior Counsel N. Sreenivasan (image) that an SGX designation would cause severe downward pressure on the three stocks. “Logically, any imposition of trading restrictions would definitely affect the market, because a restriction is quite negative,” said Seet.

She also agreed that confusion during that time over whether contra-trading was allowed or not, as well as the “herd mentality” of the stock market, contributed to this downward pressure.

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