PSE sanctions two brokerage houses

The Philippine Stock Exchange (PSE) has cracked the whip on two brokerage houses found to have breached the securities law.

In a statement, the PSE said it has imposed disciplinary action against Golden tower Securities & Holdings Inc. and HK Securities following an audit conducted by the Securities and Exchange Commission which showed both of them having short security positions and HK Securities also misstating its cash balance.

The SEC, for its part, has banned HK Securities and Golden tower from conducting any trade directly or through another trading participant except with prior approval.

PSE president Francis Lim said a PSE team has been sent to closely monitor HK Securities and Golden Tower’s daily trading activities including the movement of its securities from the central depository.

“We in the PSE will not, in any way, tolerate any act of our brokers that will prejudice the interest of our valued investors. We stand firm in our commitment to do our share to protect the integrity of our stock market,” Lim said.

Lim said he met personally with the owners of the two brokerage houses – Rodolfo Cruz for HK Securities and Kenneth Lao (Golden Tower) to immediately address the problem. 

During their talk, Cruz has committed to infuse by Sept. 19, 2008 at least $1 million to cure its short security position. Failure to do so within the period agreed upon would result in the suspension of HK Securities and subject it to takeover proceedings.

Lim said while Golden tower has already cured its deficiency, its owner has promised to inject additional equity into the company.

The PSE chief has urged the investing public to report any broker that has committed any irregularity in order for the exchange to take appropriate measures against erring trading participaticipants.

“While we conduct regular and spot audits on our brokers, we hope our investors bring to our attention any complaint against our brokers so that the Exchange can take appropriate measures to protect their interest. We need the cooperation of our investors,” Lim said.