MANILA – The Securities and Exchange Commission said Friday it expected investigators to uncover the truth behind the million-peso theft that threatened to shutter a 50-year old stock brokerage.
The investigation, led by the Capital Markets Integrity Corp (CMIC), should provide clarity on how transactions that nearly “wiped out” the position of R&L Investments “slipped past multiple control measures,” the SEC said in a statement.
The CMIC is a self-regulatory organization mandated to enforce the Securities Regulation Code with authority to investigate and resolve violations and other “irregularities” by trading participants, the SEC said.
A settlement clerk allegedly “siphoned off” stocks worth more than P700 million, the SEC said.
“The SEC expects CMIC to conduct a thorough investigation to unearth the truth behind the transactions in question, identify all parties involved, and uncover the extent of the damage to the stock brokerage, its clients and the overall market,” the SEC said.
“We are closely monitoring CMIC's ongoing investigation of R&L and possible related brokerages (such as Venture),” commissioner Ephyro Luis Amatong told ABS-CBN News.
A measure that will allow for the recording of securities in the name of individual investors is expected to be fully implemented by the first quarter of 2020 under the Name on Central Depository (NoCD) facility of the PDTC, the SEC said.
Naming individual investors will increase transparency and will give clients another way to monitor account movements through email or text message, the agency said.
Another policy, which will create a guideline for the monthly reporting of stock brokerage’s positions directly to the board of directors, is also being discussed, the SEC said.
The Philippine Association of Brokers and Dealers urged brokerages to check if their ledgers tally with that of the Philippine Central Depository Inc (PDC), its chairman Vivienne Yunchengco told ANC.
Although only one rouge R&L Investment employee was identified, there could be more houses involved, she said.
“There can be other houses where the same thing is also happening so we’re checking because they used another broker to sell the shares so we’re checking the other transactions of that broker to see if it’s only R&L or if other brokers are involved,” Yuchengo said.
Yuchengo assured investors that there was “no problem in the market” and that the theft affected nobody in the stock exchange except clients of R&L investments.
R&L Investments vowed to settle its liabilities to its clients, PSE board member Ali Yu earlier confirmed
- with a report from Warren De Guzman, ABS-CBN News