In an interview with ANC’s Michelle Krystle Ong, PSE President Ramon Monzon clarified [link] that it’s not the PSE’s job to investigate insider trading; that particular function of market oversight is reserve for the Capital Markets Integrity Corporation (CMIC), which Mr. Monzon described as a ‘self regulating organization that is totally independent of the PSE.”
Referring to the interviewer’s question about the suspicious trade activity surrounding MPI's acquisition of a stake in Axelum [AXLM 2.76], Mr. Monzon said that the PSE has approached the CMIC when it has seen such “very suspicious” activity, and that “most of the time” the CMIC is already investigating.
Mr. Monzon said that nothing gets publicized because the CMIC is not allowed to issue penalties or sanctions. It must supply its findings to the SEC, which would then conduct its own investigation and deliver punishment and corrective actions. Mr. Monzon asked investors to “be patient”.
MB BOTTOM-LINE
To get an idea of how deflating it was to hear the PSE’s hands-off stance on the obvious bad faith trading activity that is happening on its exchange on a daily basis, consider the first case that comes up when you search “INSIDER TRADING” on the SEC’s website, that of the SEC’s 2016 decision that Roberto V. Ongpin be fined P174 million for 174 counts of insider trading.
He bought shares of stock using non-public information 174 times that the SEC could prove, and it took them 7 years to convict. I couldn't find any other such convictions on their website, and gave up after a few minutes.
Why should anyone expect investors to “be patient” with a process that is clearly broken, opaque, ineffective, and slow?
Insider trading has always been a problem on the PSE, and as we prepare to welcome millions of new traders into the mix, we can’t just sit back and hope to solve these old problems using the same tools.
Are the tools compromised?
Are they the wrong tools? Is more needed to address the problem? These instances of “very suspicious” trading activity are clear-as-day to even casual traders, and it’s been this way for decades.
It’s beyond the point where it’s reasonable to expect the same system to fix the problem, and it’s getting to the point where we have to assume that this is the way the system is designed to operate.
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