In a statement issued, former Philippine Stock Exchange chairman Vivian Yuchengco said "First Resources welcomes the SEC’s move to look into stock transactions of the Government Service Insurance System coursed through us."
"For the sake of transparency, the SEC should look into the allegations against First Resources. This will give us the opportunity to ventilate our side and show that our transactions are above board and in accord with current regulation, "Yuchengco said.
The investigation was spurred by text messages sent to SEC officials, complaining about First Resources‚ cornering of all GSIS stock market deals for the first half this year. These transactions reportedly had the backing of GSIS president Winston Garcia, who is said to be close to Yuchengco.
Jose P. Aquino, head of the SEC’s Markets Regulation Department, said it is the SEC’s job to verify this kind of report to determine whether there has been a violation of the securities law and its implementing rules.
Aquino, however, said preliminary results of the investigation showed that there has been no violation of the Securities Regulation Code. "Initial results of our investigation indicated that there was nothing unusual. There was no price manipulation," he said.
He also clarified that there was nothing wrong with GSIS picking only one brokerage house to handle its buying and selling transactions.
He said any investor is free to choose his or her broker. If they think that this broker is the most qualified to execute their trades then that’s okay. There is no rule requiring the GSIS to spread out its deals to other broker firms.
"What we want to find out is whether First Resources knows anything that other people don’t‚ and has taken advantage of this material information," Aquino said. Aquino said GSIS is only required to make a disclosure of its investments in the stock market only on acquisitions involving five percent of a listed company.
"When a stockholder’s ownership in a listed corporation reaches five percent, he or she has to report this. In the case of the GSIS, it files its beneficial ownership reports on time," he said.