11 face raps in BW scam

The Securities and Exchange Commission (SEC) has recommended for criminal prosecution to the Department of Justice (DOJ) 11 broker-firms and individuals it found to have committed 23 various offenses that led to allegations of insider trading and stock manipulation of property and gaming firm Best World Resources Corp. (BW).

The partial report will be submitted before noon today to the DOJ.

The names of the suspects however, were not identified. Outgoing SEC Chairman Perfecto Yasay Jr. said that while he wanted to make the report public, he was prevailed upon by the other members of the commission en banc to stick to the rules of confidentiality.

The associate commissioners met before yesterday's press conference. "We met and it was decided to keep the report confidential. We did not make any changes in the report insofar as names and entities were concerned."

He said however, that it is not too far-fetched that the names tagged by the Philippine Stock Exchange's Compliance and Surveillance Group (CSG) which submitted its own report to the PED, are the same.

The CSG reported the following as those which traded heavily in BW during the period when its share prices rose to unprecedented levels and subsequently, plunged to its lowest depths: PCCI Securities; AT de Castro Securities; Asia Sec Equities; Securities 2000; Quality Securities; Guild Securities; Armstrong and Ang Ping Securities; PNB Securities; Aurora Securities, and Belson Securities.

The CSG also implicated presidential friend and businessman Dante Tan, president of Best World Gaming and Entertainment Corp. whose firm merged with BW.

Yasay said he is happy with the corporate watchdog's prosecution and enforcement department's (PED) partial report on BW.

"I am confident that the PED investigation has been very thorough and there is strong evidence to justify the recommendation for prosecution by the DOJ," Yasay said, adding: "I'm glad we have not screwed up in the process of investigation unlike in the past. We are very confident this time that we will get a successful prosecution of these people."

He clarified that the offenses committed do not include insider trading since this is harder to prove and the investigation on these charges by the PED could take longer to complete.

Yasay said most of the offenses constituted manipulative activities such as wash sale, kiting and other similar violations which tend to create an artificial demand for a stock which in turn bolsters its share price.

While names were withheld, Yasay assured the public there was no whitewash of the BW report nor were there attempts to exclude certain individuals and broker-firms implicated in the biggest stock market scandal that has hit the local stock exchange.

Yasay said the PED has recommended that the DOJ proceed with its preliminary investigation to determine if the charges will be pursued against the broker-firms and individuals. He said that in the course of the DOJ investigation, the number of charges as well as individuals or firms liable for prosecution could increase, while others might be let off the hook if the DOJ feels the grounds for prosecution are lacking or weak.

While the DOJ does it work, Yasay said the PED could start imposing sanctions on the violators.

He added that any violation can warrant an average penalty or fine of P500,000, suspension or revocation of licenses and disqualifying offenders from engaging in the stock brokerage business. He said, the prison terms for guilty individuals could range from a minimum of five years to a maximum of 17 years.

Yasay lauded the PED for coming up with a very through report on the controversial issue and for having withstood pressure from various influences.

He said this marks the first time in the history of the SEC that a case of this magnitude has gotten this far.

GMA: Let heads roll

Meanwhile, Vice President Gloria Macapagal-Arroyo denounced yesterday any possible attempt to clear up anyone of those behind the Best World (BW) scandal.

In a forum at the Ristorante La Dolce Fontana, Arroyo said any effort to keep off the hook those responsible in the BW scandal should be condemned.

"I will condemn any attempt at general or clubby settlements that will let those responsible off the hook," Arroyo stressed.

According to Arroyo, the BW scandal was an act of economic savagery perpetrated on the stock market which should serve as the leading edge of the world's capital markets.

Arroyo pointed out that all those people behind the BW scandal should be appropriately prosecuted in a bid to restore the people's confidence on the stock market.

"The message to the world must be that the Philippines can clean up its act, and if heads must roll in the process then so be it," she stressed.

At the same time, the Vice President urged all Filipinos to close ranks and act decisively to bring about the national agenda towards poverty elimination. -- with Mayen Jaymalin

She also asked the people to support the national agenda aimed at improving the moral standards in the government and society.

"Let us pick up from his (Estrada) admonition and unite against corruption," Arroyo said as she urged the public to support all the government agencies with such focus.