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The Securities and Exchange Commission (SEC) has ordered the market regulation arm of Philippine Stock Exchange to take over Equitiworld Securities Inc. (EQWORLD) to protect the stock broker’s customers after finding material discrepancies in its books.
The corporate watchdog on Wednesday said it had found that EQWORLD was “no longer capable to readily meet the demands” of customers, thus ordering the Capital Markets Integrity Corp. (CMIC) to seize control.
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According to the SEC, a special audit by the CMIC showed material discrepancies in the reported stock and cash positions of EQWORLD totaling 154.91 million shares worth P46.14 million.
As of end-June, CMIC likewise found that EQWORLD had no cash on hand, contradicting the P23.57 million cash on hand balance generated from its system.
“The foregoing affirms the variancies and/or discrepancies found by the CMIC, and clearly reveals that EQWORLD doesn’t have these shares … and/or it does not have sufficient cash to pay the proceeds of the sale of shares,” the SEC said.
As a result, CMIC involuntarily suspended EQWORLD’s trading operations, citing its violation of the Securities Regulation Code for harming the interests of its customers.
EQWORLD likewise failed to submit required audit documents and annual financial statements, among others, while reportedly refusing to comply with the CMIC’s orders, the commission said.
The SEC ordered CMIC to take control of EQWORLD’s books and records, as well as trade-related assets.
Another PSE member will be directed to take over the outstanding contracts relating to securities. INQ