EXPLAINER: How SEC suit allegations against Villar Land could affect public

The Department of Justice (DOJ) is already reviewing the criminal charges filed by the Securities and Exchange Commission (SEC) against the Villar Land Holdings Corp. over alleged market manipulation, insider trading, and misleading disclosures.

“When cases are filed here. It is not immediately for a preliminary investigation. We still have to go through study and scrutiny by the panel to determine whether it is appropriate already to conduct the preliminary investigation,” said Prosecutor General Richard Fadullon in Maki Pulido’s report in “24 Oras” on Monday. 

The SEC said that Villar Land reported an increase in total assets to P1.33 trillion in 2024 from P1.46 billion in 2023 due to the revaluation of its real estate holdings. 

However, the SEC flagged that the figures “were disclosed to the investing public before the completion of the company’s external audit.” 

“When the audited financial statements were later submitted, Villar Land reported total assets of only P35.7 billion - significantly lower than the amounts earlier disclosed,” the SEC said.  

GMA Integrated News is trying to reach out to the Villar family and other respondents for comments.

“Villar Land and its directors will answer all the allegations leveled against them after formal receipt of the alleged complaint," the company said in a statement.

How would the alleged violations harm the public if they were true?

Domingo Cayosa, former president of the Integrated Bar of the Philippines, warned that such practice could influence others to buy shares that would soon increase in price. 

“That information will guide or influence the buying or selling of your shares. If that’s bloated or manipulated, that is tantamount to fraud. Kumbaga nagsisinungaling ka sa publiko para mapaboran ka o kumita ka,” Cayosa said.

(In other words, you are lying to the public so that you can gain favor or make a profit.)

The SEC also alleged that Camille Villar engaged in insider trading when she purchased 73,600 shares of Villar Land in December 2017, just before the release of a corporate disclosure. 

“Yung insider trading naman that is using non-public information to your advantage. Kumbaga nakabili siya sa presyong mura, kasi alam niya na may mangyayari in the future kasi later on she could dispose that a higher price,” Cayosa explained. 

(Insider trading, on the other hand, is using non-public information to your advantage. Basically, she was able to buy at a low price because she knew something would happen in the future, allowing her to sell it later at a higher price.) 

The SEC said that the two related entities “engaged in trading activities that created artificial demand and supported the price of Villar Land shares.” 

“Sila yung kungyaring naglalaro sa merkado to create the appearance na these shares are actively traded at high prices. So siyempre kapag makikita ‘yan ng mga brokers, ire-report ‘yan sa kanilang mga kliyente…’Yun pala artificial lang ‘yun,” said Cayosa. 

(They are the ones pretending to play the market to make it appear that these shares are actively traded at high prices. So of course, when brokers see that, they will report it to their clients... but it turns out it was just artificial.) 

SEC chairperson Francis Lim said that it was important to build investor confidence in the country. 

“Building investor confidence in the Philippines is crucial… The SEC is firm in addressing fraudulent and manipulative acts that mislead the investing public and distort our capital markets,” said Lim. 

Cayosa said the alleged violations warranted criminal charges because they are violations of the Securities Regulation Code, which carry a penalty of seven to 21 years of in prison. –Vince Angelo Ferreras/NB, GMA Integrated News