In a motion asking for the reconsideration of the case, the SEC said the DOJ should not have dismissed the charges against 39 individuals, eight broker firms and at least two affiliates of a broker firm and an investment house. They were named as respondents in the charge sheet filed by the SEC before the DOJ.
According to the SEC, the DOJ’s prosecution panel had dismissed the case against the respondents, saying that the SEC had failed to establish manipulative intent, a necessary element of the crimes charged.
However, the SEC reasoned that it had already established manipulative intent by demonstrating that BW Resources Corp. was not a candidate for a blue chip position at the Philippine Stock Exchange.
The SEC asserted that the company never turned a profit and even posted a P10.59 million loss in the year that preceded the meteoric rise of its share prices in the stock market.
This meant that there was no reason for BW’s shares to rise the way it did in 1999 unless the trading was being manipulated which resulted in the price of the stock climbing from P2 per share to as high as P107 per share in one year.
The SEC alleged that this itself showed that BW shares could not have risen without manipulative moves made by the respondents.
In the investigation conducted by the SEC, Tan was named as a respondent, chiefly responsible for manipulating BW share prices through wash sale transactions where shares were sold and bought by the same person to create an impression of active trading.
Along with Tan and Juan, the SEC charged brokerage firms of undertaking wash sales. The brokers accused were Aurora Securities and Emmanuel Edward C. Co; PNB Securities and Augusto Cosio Jr; Securities 2000 and Manfred Seah; Belson Securities and Federico Lim, Mark Securities and Benito Soliven III, AT de Castro Securities Corp. and Alejandro de Castro and PCCI Securities and Federico Galang.
Accused of manipulation through matched orders were Tan, Juan, Jacob Assad, Hermogenes Laddaran, Christine Tan, Mario Juan, Ramon Lee, Lucio Co, Lilia Gonzales, Mary Ann Yu and Eduardo Lim Jr.
Brokers named in the charge sheet for this violation were Aurora, PNB, Securities 2000, Belson Securities, Mark Securities, AT De Castro Securities and PCCI Securities.
AT De Castro and Larrgo Securities Inc. with Am Paz Tanjangco were charged for making the close while 38 other individuals were accused of abusing the use of EQ trade facility.