SEC to let PSE decide on Reynolds stock issue

The Securities and Exchange Commission (SEC) is likely leave it up to the Philippine Stock Exchange (PSE) to decide on the Reynolds stock trading case, which involved a BW-like stock price manipulation last year.

This as SEC officials said they are not aware of any appeal made to the Commission by one of the eight brokerage firms tagged in the price rigging of aluminum manufacturer Reynolds Philippines Corp.

"We have not yet received any appeal but I think the PSE has ruled on the case; it’s now up to them." SEC Chairperson Lilia Bautista said.

She said the SEC would only act on the issue if there are criminal aspects tied up to the case or if there are parties involved who are not market participants.

The same criteria was imposed when the SEC pursued the PSE’s investigation on BW Resources since 1999 since the case involved individual investors who fall outside the jurisdiction of the Exchange.

Bautista’s pronouncement is also seen as a confidence vote for the PSE as a self-regulatory organization (SRO), which earlier said the Reynolds issue is a test case on the Exchange’s effectiveness as an SRO.

It was earlier reported that DBP-Daiwa Securities (Phils). Inc. filed an appeal with the SEC on its involvement in the Reynolds price scam.

The PSE has charged eight brokers with basic fines and monetary penalties after a probe yielded evidence of trading violations such as kiting, wash sale and the abuse of the Exchange’s electronic facility (EQ Trade) for the purpose of manipulating the stock’s price.

A motion for reconsideration filed by brokers who refused to pay the fines were denied by the PSE. The Exchange’s Business Conduct and Ethics Committee – a mix of professional PSE managers and stockbroker-members – decided to slap fines ranging from P20,000 to P35,000 per broker.

Prices of RPC stocks unusually soared in the first half of last year, at one time making it the heaviest traded issue, despite the company’s mediocre financial performance and debt problems. – Conrado Diaz Jr.