PSE sets auction for stock brokerage firm

MANILA, Philippines - The Philippine Stock Exchange will put up for auction local brokerage firm HK Securities Inc., which has been taken over owing to short security positions, next month. In an announcement posted at its website, the PSE's market regulation division said it would hold the public sale for HK Securities on May 14 this year, with a minimum bid price of P8.5 million. The regulator took over HK Securities last year after it was uncovered that the brokerage firm incurred short security positions by P106 million. HK Securities has also allegedly misstated its cash balance. Rodolfo Cruz, HK Securities principal owner, promised to account and produce securities of its clients but failed to cover the short security position. The irregularities were discovered after the PSE received investor complaints about the HK Securities. The PSE needs to sell HK Securities to enable the Exchange to pay the claims of its customers. Besides HK Securities, the PSE also imposed disciplinary action on Golden Tower Securities and Holdings Inc. after discovering that it also incurred short security positions. The irregularities were discovered in the course of the audit conducted by the PSE on Golden Tower. The MRD ordered the suspension pursuant to Securities Regulation Code (SRC) Rule 39.1(1)(E) to protect the interest of investors and prevent further commission of violations of the securities law and damage to the capital market. GMANews.TV