Stock broker gets 14 years jail time for BW stock price manipulation | Inquirer Business
Close  

Stock broker gets 14 years jail time for BW stock price manipulation

/ 08:04 AM May 22, 2021
Chinese stocks crash as viral panic infects markets

(AFP)

MANILA, Philippines – The Pasig Regional Trial Court has convicted a local stock broker of illegal stock trading in relation to the BW Resources stock price manipulation scandal 22 years ago.

Johnny Yap, then president, sales manager and director of Solar Securities Inc., was sentenced to 14 years in jail and ordered to pay a fine of P1 million for illegal trades that led to a 1,462-percent surge in the stock price of BW, a loss-making gaming stock.

ADVERTISEMENT

In a decision dated May 7, Pasig RTC Branch 67 found guilty beyond reasonable doubt of violation of Section 26(a)(I)(1) of the Revised Securities Act, now Section 24.1(a)(i) of the Securities Regulation Code (SRC).

The Securities and Exchange Commission filed a criminal complaint against Yap after Solar Securities was found to have committed 142 counts of buy and sell orders for BW that constituted “wash sale” transactions during the months of June and October 1999.

FEATURED STORIES

Wash sales refer to transactions wherein the buyer and seller of the stock share a beneficial owner.

A Special Operations Group (SOG) formed by the SEC in August 2000 to investigate the matter found that Solar Securities’ transactions were wash sales not only because the brokerage was both the buyer and the seller in all the 71 buy order and 71 sell order transactions, but also because the offers and bids had been made at very close intervals.

BW shares were trading for 80 centavos each at the start of 1999.

Shares in the company steadily increased in that year and by October, BW shares had reached a price of P12.50 each, the same time as when Solar Securities executed its wash sale transactions.

This is despite the fact that BW posted losses of P10.84 million in 1999 and had no corporate fundamentals.

“[N]o other conclusion may be reached but that these series of trade transactions were executed with the intention of creating a false or misleading appearance of active trading or misleading appearance with respect to the market of BW shares,” the decision read.

“Indubitably, the subject transactions were knowingly executed by Solar with no other purpose but to manipulate the market.”

gsg

The business headlines in under one minute


Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: BW, Stock broker
For feedback, complaints, or inquiries, contact us.



© Copyright 1997-2022 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.