The Securities and Exchange Commission (SEC) will recommend for prosecution to the Department of Justice (DOJ) two more brokers and two individuals for stock fraud and price manipulation of gaming firm Best World Resources Corp. (BW).
SEC Chairman Lilia Bautista, said the new names will be submitted to the DOJ next week which will then conduct a preliminary investigation to determine if criminal charges will be filed.
At the same time, the SEC's prosecution and enforcement department has sent notices to 20 more individuals, informing them that they are being investigated for their alleged participation in illegal stock trading activities involving BW.
Bautista said the SEC is continuing its investigation of possible participants in BW, and this time, is not relaying on the report submitted by the compliance and surveillance group of the Philippine Stock Exchange which has been prohibited by the Court of Appeals.
Last week, the SEC turned over a new partial report to the DOJ naming presidential friend Dante T. Lim, Jimmy Juan, Eduardo "Moonie" Lim Jr., former president of BW and five broker firms for alleged illegal stock trading of the gaming firm.
The report stated it had sufficient basis to refer the following persons and entities to the DOJ for prosecution: Dante T. Tan, president of Best World Gaming and Entertainment Corp. whose company folded in with BW through a share-swap agreement; Jimmy Juan, BW stockholder and alleged dummy of Tan. The two were found to have violated the Revised Securities Act with respect to price manipulation. Eduardo Lim, Jr., on the other hand, was found violating the broker-director rule.
The five broker firms cited for complicity in price manipulation are Aurora Securities Inc.: SEC 2000, Inc., PNB Securities Inc.; Mark Securities Corp. and Belson Securities Inc.
The partial report shows that in several instances, Tan through several broker firms, committed violations such as wash sale wherein the buyer and seller are the same and there is no change in beneficial ownership.
Tan was also cited for several done through transactions wherein the buying/selling broker places its order through another broker for the account of its client. While this is not prohibited under the law and rules, if the same is resorted to as a design to create an active market activity of a particular stock, that will tend to show in the mind of investors that there is a public demand for such stock, then it becomes a manipulate device under the provision of Section 27 of the RSA.
Lim Jr. was cited for violation of the broker-director rule. He resigned at the height of the BW scandal, after the Senate committee on banks and financial institutions which was conducting its own probe, said Lim could be liable for perjury and violation of the broker-director, rule of the RSA.
Lim is the son of chairman emeritus Eduardo Lim Jr. of the PSE. His uncle Federico Lim is president of Belson Securities Inc. Earlier, Sen. Raul Roco said Lim lied before the Senate when he claimed that he has stopped being an official of Belson when he took over as president of BW. Roco noted that Lim, president and director of BW, was also a director of Belson Securities Inc.
A person who violates the broker-director rule could be penalized from between P5,000 to P500,000 depending on the gravity of the offense and could face seven to 21 years imprisonment.
Bautista said the SEC, in the course of its investigation, is stumbling on more names and thus, the probe is being expanded. She added that those persons whose names in the old PED report did not appear in the new partial report are not yet off the hook. -