Stock manipulation, insider trading probed

MANILA, Philippines—The Securities and Exchange Commission is currently investigating six suspected cases of stock market manipulation and three suspected cases of insider trading as part of efforts to boost corporate governance and investor protection in the country.

SEC chairperson Teresita Herbosa said in a briefing that the SEC, through newly created unit Investor Protection and Surveillance Department (IPSD), was conducting daily monitoring and surveillance of listed issues whether on its own initiative, acting on anonymous tips or based on referrals from the IPSD’s counterpart in the stock exchange, the Capital Market Integrity Corp. (CMIC).

“The SEC has been investigating a lot,” Herbosa said, noting, however, that some would yield negative results. “Whether positive or negative, they’re all on record,” she said.

Of the nine cases on the table this year, Herbosa said the majority had come from CMIC referrals, although the identities of the parties being probed were not divulged pending the cases’ endorsement for prosecution.

After conducting preliminary fact-gathering, she said cases that produce positive results—or probable cases of violations—were endorsed to the SEC’s enforcement and prosecution department.

On the probe on agricultural product distributor Calata Corp., Herbosa said she had commended CMIC. “They really moved fast,” she said. “It’s a big step for CMIC.”

It was recently reported that four trading participants were penalized by CMIC, a self-regulatory organization, in relation to questioned trades on Calata. Trades on Calata shortly after the company’s public debut in May have been investigated for alleged stock price manipulation.

By October 30, Herbosa said the SEC would finish its probe and know by then whether to endorse the case to the courts for prosecution.

“Remember that we have jurisdiction to initiate criminal actions but we also can’t file criminal cases piece-meal,” she said.

When it comes to securities violations under Securities Regulation Code (SRC), it is the SEC that has the exclusive authority to file criminal complaints with the Department of Justice (DOJ). In building its case, IPSD may seek assistance from the National Bureau of Investigation, Anti-Money Laundering Council and Bureau of Internal Revenue relative to administrative cases or to support any criminal complaint to be filed with the DOJ for prosecution.

Originally posted at 02:51 pm | Wednesday, October 10, 2012