The Securities and Exchange Commission is counting on the Philippine Stock Exchange to unearth the securities fraud perpetuated by an employee of R&L Investments Inc. which resulted in the depletion of over P700 million worth of stocks.
The SEC has raised concern over how such transactions could have slipped past multiple control measures.
For one, the SEC cited a provision of the Securities Regulation Code which requires broker dealers to conduct monthly security examination, count and verification to account for discrepancies.
The long-running fraudulent activities allegedly orchestrated by R&L clerk Marlo Moron came to light only on Nov.3 after the stockbrokerage firm’s nominee and general manager Lucy Linda Lee as well as other family members discovered that their P750 million stock inventory had been depleted.
Lee submitted a video and written confession by Moron, where he claimed to have started looting the brokerage firm since 2011; that he acted alone and that he was forced to do the crime because of his casino addiction.
Aware of this case which nearly wiped out R&L’s stock position, the SEC has directed the “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.”
CMIC acts as the independent audit, surveillance and compliance arm of the PSE with the aim of instilling investor confidence in capital market institutions.
As a self-regulatory organization, CMIC is tasked to investigate and resolve violations by trading participants of the securities law as well as trading-related irregularities and unusual trading activities involving issuers.