SEC confirms Calata trading probe

By Coco Alcuaz, ABS-CBN News Channel

Posted at Aug 02 2012 10:27 AM | Updated as of Aug 03 2012 01:15 AM

MANILA, Philippines (CORRECTED) - The Securities and Exchange Commission (SEC) confirmed it is investigating the trading that boosted Calata Corp. shares three-fold in the two weeks after it listed in May, before slumping back close to their offer price.

In a text message, SEC Chairwoman Teresita Herbosa confirmed the investigation, but declined to elaborate, saying matters under investigation are confidential.

The investigation was probably triggered by a report from the Capital Markets Integrity Corp., the independent watchdog organized by the Philippine Stock Exchange just this year to help catch market manipulators.

Three sources said the CMIC filed the report with the SEC late last month, pointing to trades executed by a handful of brokerages for new clients who appear to be dummies for an unidentified person.

ABS-CBN has been unable to get a copy of the report, which one broker described as "inconclusive."  The report and investigation were first reported in Philippine Daily Inquirer's Biz Buzz.

Brokers may be cited for failing to check the background of their clients.

Chasing the alleged dummies and the person or persons they allegedly acted as dummies for may be difficult.

PSE president Hans Sicat said he doesn't have a copy, explaining that CMIC is independent and it's up to CMIC and the SEC how they will proceed.

"The PSE as an organization does not actually directly involve in this matter," Sicat said in an interview on ANC. "If this be an SEC event, it could be the Department of Justice to go after specific individuals pinpointed by the finding."

Joseph Calata, CEO of Calata Corp., said he's out of the country but will put one of his executives in touch with us. The executive has not yet contacted us.

CMIC president Antonio Garcia declined to comment.

Calata raised P271 million in May. Shares rose from an offer price of P7.50 to P23.95 in two weeks. They then shares slumped and are now trading just above P8.