First stock broker found guilty of securities fraud fined P2M

MANILA, Philippines — The president of a stock brokerage house was fined P2.1 million by a Makati regional trial court after he was found guilty of defrauding his clients in violation of the Securities Regulation Code (SRC), the first conviction secured by the government almost 13 years after the law was enacted.

The Department of Justice relayed to reporters the case of Francisco Borromeo, president of Asian Capital Equity Inc., (ACEI), who was found guilty on March 19 by branch 62 of the Regional Trial Court of Makati City of seven counts of violation of the SRC, mostly involving fraudulent acts he committed between August 1993 and November 2003.

Borromeo had been charged with violations of the Republic Act. No. 8799 in seven information filed by the DOJ’s National Prosecution Office and the Enforcement and Prosecution Division of the Securities and Exchange Commission.

He was charged of five counts of fraudulent transactions from 2000 to 2003 for selling and trading the shares of his clients without their knowledge; using a fictitious and dummy account in the selling of securities, all to the prejudice of his clients and the investing public.

Borromeo was also charged with one count of unlawfully preparing, using and maintaining two sets of books—one that contains the actual database of ACEI’s negative position and another that contains the altered database to comply with the audit requirement of the Philippine Stock Exchange and SEC.

Borromeo pleaded not guilty on all seven pieces of information against him in 2007.

But last March 19, he expressed his desire to withdraw his not guilty plea and instead to plead guilty.

State Prosecutor Peter Ong did not object and Borromeo was arraigned anew this time pleading guilty to all seven information.

In a four-page decision by Presiding Judge Selma Palacio Alaras, the trial court then found Borromeo guilty beyond reasonable doubt of the crime of violation of the SRC. He was sentenced to pay the fine of P300,000 for each count or a total of P2.1 million.

“In the event of failure to pay the fine, he is ordered to suffer a subsidiary imprisonment corresponding to the fine adjudged,” the court said.