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SEC shutters stockbrokerage firm over P700M fraud

Republika

The Securities and Exchange Commission (SEC) has reportedly stripped a prominent stockbrokerage company of its license to operate in the local bourse which would result in untold millions in income losses.


Aside from revoking its authority to operate, the SEC also slapped R & L Investments Inc., said to be one of the oldest and most respected stock brokers in the country, with a P25-million fine in connection with a P700-million fraud scheme that violated the Securities Regulation Code.


A special hearing panel of the SEC ruled that several top-ranking officers of R&L (who won’t be identified at this point) are liable for the scandalous events, as well as one well-placed trading floor representative/settlement clerk and a VSI employee.


SEC sources said what transpired was the fraudulent transfer of client shares amounting to some P700 million to a “ghost account” in confederate brokerage outfit identified as Venture Securities Inc. (VSI).


The scheme resulted in the loss of P700 million worth of client shares in R&L and in the deterioration of its financial condition, to the extent that it cannot readily meet the demands of its clients for the delivery of securities and/or payment of sales proceeds,” the SEC order said.


In a separate decision, the SEC also fined VSI a total of P32 million and disqualified certain key officers for performing similar functions for the losses incurred by scores of R&L clients.


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