MANILA (UPDATED) - A commissioner of the Social Security System (SSS) has filed an administrative complaint against two of its officials for allegedly withholding from the state-run pension fund information on stock investment prospects and then buying the stock for themselves.
The complaint claimed Reginald Candelaria and Ernesto Francisco used information they got from an accredited SSS broker to "profit" from the initial public offerings (IPOs) of 5 companies, instead of recommending them to the Social Security Commission, the policy-making body of the SSS.
Private companies take advantage of IPOs to go public for the first time and sell shares of stocks, which are now traded in the open market.
"Nalaman nila yan dahil yung stock broker ng SSS, every month nagbi-briefing yun sa amin kung ano magandang stock, ano magandang mga IPO na darating. So itong impormasyon na to na pwede silang kumita ng pera, nakuha nila dahil sa position nila,"SSS Commissioner Jose La Viña told ANC's Early Edition.
(They got the information from the stock broker of the SSS who briefs us every month on good stocks to buy, good IPOs that are coming. With this information, which they got because of their position, they can make money.)
"They used that information to make the profits for themselves."
In a personal trading pre-clearance request form he filed on June 20, 2016, Candelaria noted that one stock in question, Golden Haven Memorial Park, Inc, was “not SSS accredited” and “not being considered by SSS as investee stock.”
Candelaria cited “no conflict” in a separate clearance form for another set of stocks.
“How can it be considered an investee stock when they had intentionally failed to propose it to the (Social Security Commission)?” La Viña said in his Oct. 24 complaint.
"They traded these shares unmindful of their fiduciary duties to inform SSS."
Executive Vice President Rizaldy Capulong was included in the complaint for alleged “gross neglect of duty."
He is the chief of the SSS investment sector, which covers the capital markets group, headed by Candelaria, and the fund management group, headed by Francisco.
Also named in the complaint was chief actuary George Ongkeko Jr. for allegedly failing to “ensure strict compliance” to SSS policies as head of the risk management group.
ABS-CBN News tried but failed to get a comment from the four officials named in the complaint.
Louie Sebastian, head of the SSS media affairs bureau, said they would issue a statement.
La Viña chairs the commission's Investment Oversight Committee, which is tasked to "review and evaluate management's recommendations on any investment matter."
His complaint dated Oct. 24 claimed that Candelaria earned a gross profit of P144,844, an investment return of 4 to 11 percent in 7 to 15 days.
Some of the records submitted by Francisco showed he earned P413,000 for a “short period,” the complaint said.
“Had their scheme been allowed to continue undiscovered, the amount would have run into millions of pesos,” La Viña alleged.