The Securities and Exchange Commission (SEC) has rejected the motion of Westmont Investment Corp. (Wincorp) to lift its cease and desist order (CDO) against the company.
The SEC said it found insufficient cause to lift its CDO and further ordered the ailing investment house to submit additional documents needed for its investigation into alleged fraud and misrepresentation committed by Wincorp.
SEC Chairman Lilia Bautista said the investigation of Wincorp will continue and asked the assistance of the Department of Justice (DOJ) to expedite its probe.
"We have asked the DOJ for assistance and they will be detailing two people to help us in our fact-finding objective, and in the process, for them to determine if criminal charges are warranted," Bautista said.
There are two cases pending against Wincorp logged at the SEC's Securities Investigation and Clearing Department and another one at the Prosecution and Enforcement Department.
Wincorp legal counsels Romulo Serrano & Carmello Law Offices previously filed a motion for reconsideration with the SEC, and asked to be furnished documents to justify the issuance of a CDO.
The SEC issued the CDO against Wincorp, preventing it from further soliciting and issuing commercial papers.
Based on complaints of several investors, SEC said present and previous stockholders and beneficial owners of Wincorp and affiliate bank, United Overseas Bank Philippines (formerly Westmont Bank), violated several laws of the Revised Securities Act, particularly the 19-lender rule which prohibits investment houses from securing loans from more than 19 creditors.
The SEC said Wincorp has been offering to the general public, unregistered securities in the form of a confirmation advice (CA). Its business of lending or extending credit to corporations or individual borrowers, requires the execution of a promissory note and loan agreement payable to Wincorp.