Prominent businessman faces DOJ charges over SRC breach

MANILA, Philippines — A well-known individual will soon face charges from the Department of Justice (DOJ) for violating the Securities Regulation Code (SRC), acting on a complaint filed earlier by the Securities and Exchange Commission (SEC).

The DOJ has issued a resolution finding probable cause to indict the individual who has drawn the ire of corporate regulators, sources told The STAR.

However, the industry sources declined to reveal yet the identity of the respondent as the DOJ has yet to make public its resolution.

The individual is involved in a business which has been found to have violated disclosure requirements of the Philippine Stock Exchange and the SEC.

Aside from violations of the SRC, the individual is also likely to be investigated for money laundering because violations of the SRC are considered a predicate crime, the same source said.

From 2015 to 2016, data from the SEC showed that 350 cases were investigated for violations of the SRC. In 2016, the estimated proceeds of SRC cases investigated involved about P900 million.

From 2011 to 2016, 16 money laundering cases investigated were predicated on SRC violations and estafa.

The Anti-Money Laundering Council (AMLC) also filed 14  petitions for the issuance of freeze orders, 10 petitions for civil forfeiture and two money laundering cases for the same period.

Data from the AMLC showed that six cases investigated from 2015 to 2016 involved criminal proceeds amounting to P231 million.

The number of cases on estafa and SRC violations remains significantly high, it said.

In addition, the number of money laundering cases predicated on the two crimes remains minimal. The amount of criminal proceeds involved in the six money laundering investigations in 2015 and 2016 translates to only three percent of the total amount of criminal proceeds in said crimes. The threat remains high, the AMLC said in 2017.

If the case against the individual progresses and ends up in a conviction, it will mark a victory for the SEC, which has yet to secure a conviction from the courts for insider trading.

However, despite not being able to secure a conviction yet for insider trading, the SEC said it was successful in securing convictions for other violations of the Securities Regulation Code such as the 2015 conviction of “pyramid scam queen” Rosario Baladjay who was sentenced to a total of 455 years for violation of the SRC.