PSE recommends criminal raps vs HK Securities officials

The Philippine Stock Exchange (PSE) has recommended the filing of criminal charges against officials of erring brokerage house HK Securities.

“We have already written the Securities and Exchange Commission, asking for the imposition of all sanctions against HK Securities to prevent a repeat of said incident,” said PSE president Francis Lim.

The letter was in response to a SEC directive requiring the exchange to submit a report containing all its findings and recommendations with respect to HK Securities for the purpose of instituting administrative or criminal actions against the responsible persons when warranted. 

The PSE has suspended the trading operations of HK Securities due to its failure to remedy its short security position of P106 million and infuse the required $1.15 million within the given time. Upon order by the SEC, the local bourse has taken control of HK Securities’ trade-related assets to pay its liabilities to clients. 

An investigation conducted by the PSE showed that HK Securities’ financial condition has deteriorated that it cannot readily meet the demands of its customers for the delivery of securities and/or payment of sales proceeds. 

The broker firm’s total liabilities have exceeded its liquid assets, the PSE pointed out.

HK Securities was also found to have misstated its cash balance by over P9 million which are under the personal accounts of its owner Rodolfo Cruz.

Lim, nevertheless, assured the clients of HK Securities that the exchange is taking steps to hasten the recovery of their entitlements. 

According to the PSE, the settlement of HK Securities’ liabilities will be done through the sale of its trading rights and other trade-related assets, including PSE shares, liquidation of its paid-up capital and/or overseeing the payment of claims against its surety bond. 

The PSE will also work closely with the Securities Investors Protection Fund Inc. (SIPF) to ensure an orderly distribution of the property and assets of HK Securities.

Under the SIPF rules, the maximum claim that a customer can make on the fund is P100, 000. 

“Once again, I would like to assure HK Securities clients and the public in general, that we would do our part to counter any act of our brokers that will prejudice the interest of our valued investors. We stand firm in our commitment to do our share to protect the integrity of our stock market,” Lim said.