Investors sue brokerage firm and principal for estafa

MANILA, Philippines-Several clients of brokerage firm HK Securities Inc. have filed criminal charges of syndicated estafa against HK directors and officers before the Department of Justice last Tuesday. Four complaints of syndicated estafa have been filed against Rodolfo V. Cruz and the members of his family as well as other non-executive directors of HK Securities for numerous fraudulent transactions involving the complainants’ funds and securities. Complainants include Jaime and Francisca Panganiban; Dominic Uy; Lydia C. King; and Miguel Uy. Francis Lim, PSE president and chief executive officer, said the PSE supports the suit by the complainants. “It is encouraging to note that HK’s clients have come forward to assert their rights as investors. A set of investors who know and assert their rights is one of the best forms of investor protection," Lim said. The PSE took over HK’s operations upon order from the Securities and Exchange Commission last September 25, 2008 when the company failed to account and produce securities of its clients worth approximately P106 million. HK Securities and its principal stockholder, Rodolfo V. Cruz, previously undertook but failed to pay the short security position. “The filing of a criminal case for syndicated estafa which, under the law, is non-bailable is a powerful message from clients to their brokers that they will not tolerate their brokers fooling around with their funds and securities. What this means is that stock market investors are well aware of their rights and are not afraid to assert it. So let us all do our fair share in protecting the integrity of our stock market and always keep in mind to safeguard the interest of our valued investors," Lim added. Prior to the takeover, the PSE Market Regulation Division (MRD) has suspended HK Securities from its trading operations based on various violations of the securities laws uncovered during MRD’s audit of HK. The MRD subsequently issued an order expelling HK from the PSE, among other sanctions imposed for said violations. HK has appealed the sanctions. Currently, the PSE is in the process of validating HK Securities customers’ claims which will be the basis in allocating and distributing the remaining trade-related assets of HK pursuant to SEC’s takeover order. Based on records, only 140 of the total 892 clients of HK have submitted their affidavits of claim to MRD. Lim has also vowed that the PSE will work closely with the Securities Investors Protection Fund Inc. (SIPF) to advance some funds to them even prior to the final liquidation of the assets and liabilities of HK Securities.GMANews.TV