Brokers disown ex-PSE trader

NBI: Total take could reach P300 M

MANILA, Philippines - With a promise of up to 50 percent return on investment within just 15 days, Jose Cecilio “Jay” Peñaflor persuaded victims to buy shares of stock, in the process allegedly pocketing what probers estimate could be as much as P300 million.

Peñaflor, former marketing education head at the Philippine Stock Exchange (PSE), faces 18 estafa complaints filed with the National Bureau of Investigation (NBI) and the Quezon City prosecutor’s office.

Stock market brokers disowned and distanced themselves from him yesterday, saying he is not a legitimate stockbroker.

The PSE also stressed that while Peñaflor’s scheme involves the use of existing brokerage companies licensed by the bourse, he is not connected with the brokerage firms he mentions to clients.

“The PSE has issued an advisory that he is not connected with the three brokerage houses,” the PSE said, stressing Peñaflor is not a broker.

Based on records of the iPSE, Peñaflor is not employed as a trader or agent of any accredited trading participant of the PSE.

Records also show that he is not licensed by the Securities and Exchange Commission as a salesman or trader of any of the trading participants.

Industry sources said that in a generic sense, Peñaflor is a stock market trader, or one who buys and sells stocks.

But in the strict sense of the word, he is not a licensed stockbroker and therefore cannot buy and sell stocks on behalf of clients.

Sources said Peñaflor misrepresented himself as a broker and capital markets expert, and took credit for market-related education and investment literacy projects.

Stock market investors have asked the NBI to help them recover an estimated P100 million they invested through Peñaflor.

As part of the scheme, Peñaflor allegedly offered these stocks at huge discounts and guaranteed high returns within several days, if clients would make reservations and pay in advance.

Astro del Castillo, managing director of First Grade Finance Inc., said to avoid falling prey to investment scams, investors should deal directly with the trading participants of the PSE.

“All transactions must be coursed through an authorized stockbroker or trader through a brokerage accredited by the PSE,” Del Castillo said.

The NBI is asking the complainants to cooperate and pursue their cases.

“Most important in cases like this is the participation and cooperation of complainants. There are times that complainants are paid the economic value of their cases and they become less interested to pursue it,” Manuel Antonio Eduarte, head of NBI-Anti-Organized and Transnational Crime Division, said yesterday.

P300-M total investment

Eduarte said Peñaflor might have taken around P300 million from his victims, based on estimates of the complainants.

He said the amount includes not only the cash invested, but also the interest earned.

Eduarte said Peñaflor promised huge interest rates for every investment, which could go as high as 20 percent, depending on the earnings of the company he refers to the investors.

He said there are at least 18 complaints filed against Peñaflor with the NBI and the Quezon City prosecutor’s office.

A certain Francis Carlo Cruz has filed charges of syndicated estafa and violation of Batas Pambansa 22 or the Bouncing Checks Law against Peñaflor with the Quezon City prosecutor’s office.

Preliminary investigation for these cases was set on March 17.

The court has yet to release details of the case.

No PSE brokers involved

The PSE said none of its accredited brokers was found to be involved in Peñaflor’s alleged fraudulent schemes.

In an advisory issued in December, the PSE warned the public against Peñaflor, saying he has not been connected with the bourse since 2013.

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

Charged and released

Peñaflor had been charged before the Department of Justice (DOJ) for syndicated estafa, but the prosecutor ordered him released pending further investigation.

A resolution issued on Feb. 19 by Assistant State Prosecutor Rodan Parrocha stated the complaint filed by a certain Joyce Marie Lao against Peñaflor lacked evidence.

The complainant reportedly failed to present the text messages between her and Peñaflor, which could have established the respondent’s scheme of obtaining money from her.

The DOJ said the charges against Peñaflor pertained to past transactions that Lao had with the respondent, and not to the act of receiving P500,000, for which the suspect was arrested.

It said Peñaflor was not yet cleared, as government prosecutors would still have to conduct preliminary investigation on the charges.

NBI agents arrested Peñaflor on Feb. 16 in an entrapment operation after he allegedly obtained P500,000 from the complainant.

The money was supposed to be deposited through the Regina Capital Development Corp., which Peñaflor claimed to be connected with.

Peñaflor’s whereabouts were unknown since his release from detention.

The Bureau of Immigration (BI) said no hold departure order (HDO) or lookout bulletin has been issued against the suspect.  – With Edu Punay, Evelyn Macairan, Romina Cabrera