The Court of Appeals (CA) has affirmed the indictment of eight early shareholders of Calata Corp. for stock manipulation following the company’s initial public offering (IPO) in 2012, the Securities and Exchange Commission (SEC) said on Thursday.
The SEC statement cited a Sept. 10, 2019, decision by the Special Sixth Division of the appellate court.
In its decision, the CA allowed the SEC to nullify resolutions of the Department of Justice (DOJ) that dismissed the complaint and directed the withdrawal of the criminal case filed against the errant shareholders.
The SEC earlier filed the complaint against Calata shareholders Michael Ilustre Angeles, Carmelo dela Cruz Bunag, Arnold Ryan Daquis Dellosa, Richie Ramille Isip, Arnold Daquiz Martin, Dennis Philippe Vistan, Zandro Sigfrido Zulueta and Gary Lincoln Taboso before the DOJ-Task Force on Securities and Business Scam on Nov 26, 2012.
The parties can still elevate the case to the Supreme Court.
The SEC alleged that the shareholders employed manipulative devices such as “painting the tape” and “hype and dump” immediately after Calata went public on May 23, 2012.
By engaging in high-frequency, high-volume buying and selling transactions, the shareholders artificially inflated the price of Calata, a livestock and agriculture distributor, before dumping the shares to unwitting investors and making considerable profits, the SEC alleged.
During this period, Calata’s share price more than tripled from P7.35 a share to P23.95 before falling in a matter of days.
The errant shareholders traded their respective shares by opening accounts with several brokers, the SEC further said.
Calata went public via a P270-million IPO. It was delisted in 2017 after repeatedly violating the disclosure rules of the Philippine Stock Exchange.