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SEC says Calata stock price manipulated

Agency readies charges against 1st batch of respondents
/ 12:56 AM November 10, 2012

The Securities and Exchange Commission has found evidence of stock price manipulation involving shares of newly listed agricultural product distributor Calata Corp.

The Securities and Exchange Commission has found evidence of stock price manipulation involving shares of newly listed agricultural product distributor Calata Corp., unmasking and preparing the criminal prosecution of an initial batch of more than 10 people.

In a briefing on Friday, SEC chairperson Teresita Herbosa said the corporate watchdog approved a recommendation from the agency’s enforcement and prosecution department (EPD) to file criminal charges against the first batch of respondents in the Calata case.

She said there might be other persons, institutions and acts of violations not covered by the SEC’s recent investigation and assured the public that the agency would not stop investigating. The identities of the the individuals were not provided by the SEC.


“As we speak, they’re still continuing with the investigation with respect to the identities of other target respondents as well as other acts, which may constitute price manipulation but which were not covered by the investigation that was finished October 30,” Herbosa said.

She said the EPD was given the go-ahead to draft a complaint-affidavit that would be submitted to the Department of Justice but the SEC en banc would still have to give its imprimatur to the final court filing. She said this might happen within the next two SEC en banc meetings.

The SEC chairperson said the EPD could now draft the criminal complaint with respect to the first batch of respondents. She said the findings were “supported by facts and evidence that they have gathered so far.”  Herbosa said the SEC’s probe was “far from over.”

“The investigation is not complete with regards to other persons and entities. Remember, this is not just criminal complaint but also with respect to the administrative aspect,” she said.

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

Herbosa said there were also John Does to be included in the criminal complaints, referring to those people who might be involved but have not yet been identified at the time of the court filing but could be still unmasked later on.

“Biz Buzz” earlier reported that the investigation of the Calata case was triggered by P4 billion worth of transactions during a two-week period after the company’s listing in May that, in turn, brought share prices to dizzying heights. For its part, Capital Markets Integrity Corp. (CMIC)—an independent entity under the Philippine Stock Exchange—earlier identified seven persons involved in the questionable trades.

But while the CMIC report managed to identify the persons who committed the unscrupulous trades of Calata, these were believed to be only “dummies” who were not capable of orchestrating stock price manipulation.


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TAGS: Calata Corp., Markets and Exchanges, Philippines, stock price manipulation, stocks
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