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In a statement, the Securities and Exchange Commission said a special hearing panel canceled the license of R&L, as well as disqualified its key officers and the owner of the account used to siphon off client shares from the stock brokerage.
AFP, file

SEC cancels R&L Investments’ license over P700-million stock theft

(Philstar.com) - June 15, 2021 - 5:27pm

MANILA, Philippines — Corporate regulators on Tuesday said they revoked the license of troubled brokerage firm R&L Investments Inc. following a multi-million peso stock theft over a year ago that led to its collapse.

At the same time, brokerage Venture Securities Inc. sought to distance itself from the scandal that also saw the termination of its license.

In a statement, the Securities and Exchange Commission said a special hearing panel canceled the license of R&L, as well as disqualified its key officers and the owner of the account used to siphon off client shares from the stock brokerage.

In addition, the panel imposed monetary penalties totaling P25 million against the brokerage, its key officers and the client involved in the fraudulent scheme that led to the collapse of one of the country’s oldest stock brokerages.

An investigation by the SEC in 2019 showed that approximately P700 million worth of propriety and client shares were illegally transferred to another account and were sold without client authorization by R&L’s settlement clerk Marlo Moron.

Moron reportedly admitted to forging reports to conceal his actions from the management. The rogue employee said he acted alone and had no cash or securities left to return.

The SEC later ordered the Capital Markets Integrity Corporation (CMIC) to take over the operations of R&L following the discovery of unauthorized transfers of shares to the account of a certain Julieto Sulapas in Venture Securities. In its decision dated June 11, the SEC’s special hearing panel found “acts and omissions” on the part of Venture Securities and its officers that have “indispensably contributed to, if they had not been the proximate cause of, the losses incurred by the clients of R&L.”

As a result, the SEC also revoked the license of Venture Securities and imposed penalties totaling P32 million against the brokerage and its officers for “the fraudulent transfer of client shares” from R&L Investments. Wilfred Racadio, president of Venture Securities, said his company will seek the reversal of the SEC’s decision.

“Venture Securities has not committed any fraudulent act nor are we the proximate cause of any fraud which may have led to the collapse of R&L Investments. The decision of the Special Hearing Panel of the Markets and Securities Regulation Department of the Securities and Exchange Commission is not final,” Racadio said.

“We intend to exhaust all administrative and legal remedies available to us to prove that we have not committed any fraud and that we have acted well within the bounds of the rules of the SEC and the PSE as a broker,” he added. 

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