MANILA, Philippines — Corporate regulators upheld actions against embattled brokerage Venture Securities Inc. (VSI), citing “multiple trading violations” that paved the way for the P700-million stock theft that affected clients of 55-year-old brokerage R&L Investments Inc.
VSI lost an appeal before the Securities and Exchange Commission to reverse the resolution issued by Capital Markets Integrity Corp. (CMIC), which found the stock brokerage in violation of the self-regulatory organization’s rules and imposed a corresponding penalty of P5.16 million.
“[T]he records show that Venture effected and executed a considerable number of transactions which the CMIC found and substantiated to have violated the CMIC Rules in relation to the Implementing Guidelines,” the SEC’s decision read, noting that VSI itself admitted such violations although not in their entirety.
CMIC issued the assailed resolution on July 10, 2020 following the discovery of fraudulent transfers of client shares from R&L to the account of a certain Julieto Sulapas in VSI.
The transactions — facilitated by R&L’s settlement clerk Marlo Moron on behalf of Sulapas while acting as a trading floor assistant and settlement clerk of R&L through EQ trades, or transfers of shares from one broker to another — resulted in the loss of P700 million worth of client shares in R&L.
After conducting a special audit, CMIC found that VSI failed to properly record several transactions executed by and assigned to Sulapas. The multiple discrepancies in the records proved the failure of VSI to exercise due diligence, according to CMIC.
“It bears emphasis that the development and integrity of the market also depends on the reliability of the records of its Trade Participants for it is in the proper and dutiful upkeep of these documents that the investing public derives confidence to participate in the economic activity and invest their hard earned money,” the SEC said.
The SEC already revoked the license of R&L and VSI and imposed hefty fines on company officials. VSI has a pending appeal before the SEC to reverse the termination of its license and maintained that the company “is as much a victim as the clients of R&L.” — Ian Nicolas Cigaral