SEC poises criminal raps against Wincorp officials

The Securities and Exchange Commission (SEC) has started preparing criminal charges against officials of Wincorp Investment Corp. (Wincorp) for violations of the Securities Code.

According to lawyer Emilio Aquino, the SEC’s Prosecution and Enforcement Department (PED) has expanded its investigative report on Wincorp to include the violation of the provisions of Section 29 (a-1) and (a-2) which have denominated as antifraud provisions of the Revised Securities Act (RSA).

Contract Theory, which avers "that the issuance of confirmation advice by Wincorp in exchange with the investment of the investors to be loaned out to borrowers, constitute a scheme which is in the nature of an investment contract."

He added that the non-registration of the said contract will hold the company accountable under Section 56 of the RSA.

Because of these violations of the Securities Code, he said the SEC should file criminal charges against the directors of Wincorp before the Department of Justice. The case, he noted, should be referred to the agency’s Money Market and Operations Department (MMOD) for administrative fines and penalties.

SEC Chairperson Lilia Bautista ordered a more thorough investigation on Wincorp following complaints lodged by several investors who claimed to be victims of the investment firm’s malpractices.

The PED earlier asked Wincorp’s 22 borrowers to furnish the agency with documentary evidence before filing charges against Wincorp. According to SEC records, the investment firm had extended credit to corporate and individual borrowers after requiring them to execute promissory notes and loan agreements payable to it which are then used as reference collateral to Wincorp’s funders.– Rommel Ynion