Following the collapse of Three Arrows Capital (3AC), its co-founders Zhu Su and Kyle Davies have been banned from engaging in financial management activities in Singapore for the next nine years, a press release from the Monetary Authority of Singapore (MAS) said on Thursday.
Their whereabouts remain unknown, but they are suspected to be in Dubai.
Ms. Loo Siew Yee, a spokesperson for the Monetary Authority of Singapore (MAS), attributed the penalty to improper risk management and neglect of their duties.
Yee stated, “Senior management of fund managers are required to implement robust risk management measures to protect the interest of investors. MAS takes a serious view of Mr. Zhu’s and Mr. Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties. MAS will take action to weed out senior managers who commit such misconduct.”
The ban prohibits Zhu Su and Kyle Davies from participating in regulated activities and from holding roles as directors or substantial shareholders in any capital market services firm.
Additionally, MAS revealed that 3AC had not established a risk management framework to identify, monitor, and address risks associated with cryptocurrency and digital asset investments, compounding their regulatory violations.
Further offenses mentioned in the MAS press release include the failure to notify and the provision of false information regarding the employment of a hedge fund manager named Cheong Jun Yoon Arthur. Arthur had worked at 3AC between August 2020 and September 2021, but the required notification to the financial authority was not made within the stipulated timeframe.
When questioned in January 2022, 3AC claimed that Arthur did not engage in regulated activities at the hedge fund. MAS determined this information to be false, confirming Arthur’s role as a fund manager at 3AC.