Broker flees with P100 M

Iris Gonzales (The Philippine Star) - March 6, 2016 - 10:00am

MANILA, Philippines – Stock market investors have sought the assistance of the National Bureau of Investigation (NBI) to get back an estimated P100 million that they were duped into investing in an alleged scam through a former Philippine Stock Exchange (PSE) employee.

PSE president Hans Sicat said the total amount of money taken from investors is believed to be P100 million, much larger than the initial estimate ranging from P20 million to P30 million.

These investors – thinking that the funds would be invested in various legitimate stocks – were allegedly duped by seasoned trader Jose Cecilio “Jay” Peñaflor, the PSE’s former assistant head of market education.

“It’s estimated to be P100 million,” Sicat said in a chance interview.

He said Peñaflor, using his “silver tongue,” convinced investors to course their money through him.

One group of investors alone invested P30 million.

NBI agents arrested Peñaflor last week following complaints from his alleged victims. He was detained but was later released for still unclear reasons, according to industry sources.

The Securities and Exchange Commission (SEC), the corporate regulator, said Peñaflor has been using the names of accredited brokers to convince investors that his transactions are legitimate.

Sicat, however, said the PSE had conducted a check on its accredited brokers and none was found to be involved in Peñaflor’s allegedly fraudulent schemes.

In an advisory published last December, the PSE issued a warning to the investing public against Peñaflor.

It said Peñaflor has not been connected with the PSE since 2013.

Furthermore, the PSE said Peñaflor is not connected with registered brokers Regina Capital Development Corp, H.E. Bennett Securities Inc. and Venture Securities Inc.

“Any transaction made by him on behalf of the PSE and/or the brokers will not be honored by said companies,” the PSE said.

The PSE issued the advisory amid complaints from small investors who said that Peñaflor had victimized them.

The PSE advised investors to transact only with authorized agents and traders of PSE trading participants.

During his stint at the PSE, Penaflor was considered one of the chief architects of the bourse’s projects such as the Academy Website, television-radio-print campaigns, the bull run, financial and investment literacy roadshows, and the integrated viral education strategy, which became key to the market education campaign.

In 2014, Peñaflor filed a case against the PSE for “illegal dismissal” before the National Labor Relations Commission but lost the case in May 2015.

According to his profile, he is currently a capital markets and economics consultant in Congress.

An email sent by The STAR to Polistrato, a consultancy company that he owns, did not get a reply.

SEC officials said Peñaflor’s scheme is that he represents himself as associated with the PSE and certain registered brokers but the regulator stressed that he is not registered with the commission.

In its separate advisory, the SEC said the scheme employed by the suspect appears to constitute fraudulent transactions under Section 26 and violation of Section 28 of the Securities Regulation Code and its Implementing Rules and Regulations.

“In this regard, the public is hereby advised to exercise caution in dealing with this person and in investing their money in what appears to be a high-yield investment,” the SEC said.

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