Court orders arrest of HK Securities execs

MANILA, Philippines - The Pasig Regional Trial Court has ordered the arrest of five officers and directors of brokerage firm HK Securities Inc. on charges of syndicated estafa.

Covered by the arrest order issued by Branch 265 of the Pasig RTC last May 25 are HK Securities principal owner Rodolfo V. Cruz, Cecilia F. Cruz, Primalee Cruz-Cordero, Abelardo R. Cordero and Melogen Buesa.

The court recommended no bail for the accused who are still at large.

It would be recalled that in 2008, several complaints of syndicated estafa were filed with the Department of Justice (DOJ) by clients of HK Securities against the accused as well as other non-executive directors for numerous fraudulent transactions involving the complainants’ funds and securities.

The Philippine Stock Exchange (PSE) took over HK Securities’ operations upon an order from the Securities and Exchange Commission on Sept. 25, 2008 when the company failed to account and produce securities of its clients worth approximately P 106 million.

HK Securities and Cruz had promised but failed to pay the short security position.

Prior to the takeover, the PSE Market Regulation Division (MRD) suspended HK Securities from its trading operations based on various violations of the securities laws uncovered during MRD’s audit of HK Securities. The MRD subsequently issued an order expelling HK Securities from the PSE, among other sanctions imposed for the violations. HK Securities had appealed the sanctions.

The PSE is in the process of liquidating the trade-related assets of HK Securities and distributing the pro-rata allocation of the claimants.