PSE unit maintains Venture Securities violated law

MANILA, Philippines — The Capital Markets Integrity Corp., the regulatory arm of the Philippine Stock Exchange, has maintained that Venture Securities Inc. (VSI), chaired by PSE director Eusebio Tanco, violated the country’s securities laws.

CMIC cited the Securities and Exchange Commission’s decision denying the appeal of VSI and affirming the findings of CMIC that the brokerage company failed to properly record several transactions.

The SEC earlier revoked the license of both VSI and R&L Investments due to unauthorized transfers of proprietary and client shares worth more than P700 million between the two brokerages.

The unauthorized transfers of shares involved the transfer to the account of a certain Julieto Sulapas in VSI.

The transactions were facilitated by one Marlo Moron on behalf of Sulapas while acting as a trading floor assistant and settlement clerk of R&L through EQ trades or the transfer of shares from one broker to another.

The SEC likewise noted the multiple discrepancies in the records, which prove VSI’s failure to exercise due diligence. VSI also allowed Julieto Sulapas to continue to execute trades and use its facilities, notwithstanding the trading participant’s awareness that he had been trading considerably beyond his declared financial capacity.

CMIC and SEC also agreed that VSI failed to properly supervise the activities of its employees, resulting in multiple violations of securities laws.

“SEC’s decision resolutely substantiates CMIC’s findings and validates CMIC’s actions in enforcing the securities laws and protecting the interests of the investing public and the capital market institutions. VSI’s actions laying blame on CMIC are mere squid tactics meant to divert attention from the real issues as discussed above. The infringements of the securities laws were committed within and by VSI itself,” CMIC said.

VSI denied that it was involved in securities fraud or that it violated securities laws. Thus, it would exhaust all legal remedies to contest the findings of the SEC and CMIC.

“The investigation into the anomalous conduct of one Marlo Moron of R&L Investments has unnecessarily dragged VSI. Records show that Mr. Moron, acting as both trader and settlement clerk, in violation of the SEC rules for a brokerage firm, executed EQ trades indicating that he has the access code of R&L Investments to utilize the PCD system,” VSI said.