SEC En Banc Case No. 10-11-246 Sarangani Securities, Inc. vs. Market Integrity Board of the Philippine Stock Exchange, Inc.

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SECURITIES AND EXCHANGE COMMISSION SEC Bldg. EDSA, Greenhills, Mandaluyong City Republic of the Philippines

SARANGANI SECURITIES, INC.. Appellant,

versus For: Appeal SEC En Banc Case No. 10-1 1-246

MARKET INTEGRITY BOARD OF INC. THE PHILIPPINE STOCK EXCHANGE. Appellee.

DECISION

Market Integrity Board of the Philippine Stock Exchange (hereinafter referred to as "Appelle"), Securities, Inc. (hereinafter referred to as "Appellant") seeking the reversal of the decision of the findings of the Market Regulatory Division of the Philippine Stock Exchange ("hereinafter referred to as "MRD"). which denied the motion for reconsideration filed by appellant and affirmed the Decision and For consideration of the Commission En Banc is the Appeal filed by Sarangani

The facts of the case are as follows:

having conducted its regular examination of the books and records of the Appellant, sent the to explain the same within five (5) days from receipt thereof.? Appellant a letter dated 08 July 2008 containing a summary of its audit findings and directing it On 3 July 2008, Appellant and MRD met for an Audit Exit Conference.' The MRD, after

Findings. On 15 July 2008, Appellant submitted to the MRD its response to the Summary of Audit

upon Appellant non-monetary sanctions, viz - On 18 July 2008, the MRD sent the Appellant a copy of its Decision4 which imposed

2 Id., pp. 48-49, 95-96. 3 Id., p.94. ' Records, p. 93.

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Market Integrity Board of the Philippine Stock Exchange SEC En Banc Case No. 10-11-246 Saranggani Securities Inc. v. Page 2 of 4

on your firm for failure to comply with the relevant provisions of the Securities Regulation Code ("SRC") and its implementing rules and regulations (the "SRC Rules"): the Market Regulation Division ("MRD") has decided to impose the following sanctions "xxx Upon evaluation of the audit findings based on your referenced examination.

2001; and a) Incidence of non-compliance with SEC Memorandum Circular No. 12, Series of

Salesmen/Traders" b) Incidence of non-compliance with Code of Conduct and Professional Ethics for

received on the same date and was subsequently endorsed to the Appellee for its appropriate action. On 23 July 2008, Appellant sent a letter-appeal addressed to the MRD, which was

was denied, viz In a letter dated 03 December 2008, the Appellee informed the Appellant that its appeal

a violation by Sarangani Securities Inc. of SEC Memorandum Circular No. 12, Series of by said trading participant be, as it is hereby denied. 2001 (Broker Director Rule) be, as it is hereby, affirmed and the appeal taken therefrom "xxx RESOLVED That, the finding by the Market Regulation Division ("MRD") of

12, Series of 2001 be as it is hereby likewise affirmed. Securities Inc. for non-compliance -- first violation of SEC Memorandum Circular No. RESOLVED Further, that, the sanction imposed by the MRD citing Sarangani

Securities Inc. of the Code of Conduct and Professional Ethics for Salesmen/Traders and the imposition of the sanction non-compliance - first violation be as they are hereby affirmed and the appeal taken therefrom by said trading participant be, as it is hereby denied. RESOLVED Furthermorc, that the finding by the MRD of a violation by Sarangani

with the regulations and maintain only one account. RESOLVED Finally, that Mr. Ian Antonino be, as he is thereby directed to comply

Order directing Appellant to file a verified Memorandum of Appeal and to pay the corresponding the Commission the Appellee's decision.' On 30 September 2011, the Commission issued an Hence, the instant appeal. Appellant, in a letter dated 16 December 2008, appealed with

Id., pp. 28 - 29, 73 - 74. 7 Id., pp. 11 - 12. S Id., pp. 30 - 44, 75 - 89. 4 Records, pp. 46 - 47, 91 -- 92.

Market Integrity Board of the Philippine Stock Exchange SEC En Banc Case No. 10-11-246 Saranggani Securities Inc. v. Page 3 of 4

docket fee within fifteen (15) days from receipt of the Order,3 which was complied with on 18 October 2011.9

violation was the first offense of such kind by Appellant and was merely an oversight and a misunderstanding of the rules on its part. prescribed sanction in the amount of P20,000.00 to P50,000.00 for each of the alleged violations committed by Appellant. It implores the ieniency of the Commission considering that said Appellant asserts that the Appellee and the MRD erroneously imposed against it the

Reply Memorandum within ten (10) days from receipt of said Order,1 which was complied with on 08 November 2011. On 24 October 2011, the Commission issued an Order directing the Appellee to file a

upholding the Decision of the MRD against Appellant. The ultimate issue to be resolved in this Appeal is whether the Appellee erred in

The Appeal is without merit.

P20,000.00 to P50,000.00, the MRD's 18 July 2008 Decision clearly imposed non-monetary sanctions of "incidence of non-compliance" against Appellant, viz - Contrary to Appellant's claim that MRD imposed against it a monetary penalty of

the Market Regulation Division ("MRD") has decided to impose the following sanctions on your firm for failure to comply with the relevant provisions of the Securities Regulation Code ("SRC") and its implementing rules and regulations (the "SRC Rules"): "xxx Upon evaluation of the audit findings based on your referenced examination.

Series of 2001; and c) Incidence of non-compliance with SEC Memorandum Circular No. 12,

for Salesmen/Traders" d) Incidence of non-compliance with Code of Conduct and Professional Ethics

Accordingly, the Appellee correctly affirmed MRD's 18 July 2008 Decision and Findings.

non-compliance" does not bring with it a corresponding monetary penalty. It constitutes a mere result of the 2008 regulatory examination. It must be emphasized that a sanction of "incidence of Appellant is not included among those trading participants imposed with monetary penalties as a Moreover, the Memorandum for Brokers No. 2009-0268 dated 8 May 200912 shows that

2 Id., pp. 22 - 56. I Id., p. 62 - 107. 12 Results of the 2008 Annual Regulatory Examination of Eighty-Nine (89) Trading Participants; Id., pp 62. 72. I Id., . 60. 8 Records, p. 16.

Market Integrity Board of the Philippine Stock Exchange SEC En Banc Case No. 10-11-246 Saranggani Securities Inc. v. Page 4 of 4

citation, and as clarified by Appellee in its Reply Memorandum, is of lesser severity than a written reprimand or warning. '.

have the penalty reduced from monetary to non-monetary arguing that the violations have been committed inadvertently or unintentionally, and for the first time. commission of a violation of the pertinent rules of the Commission. Instead, it merely seeks to Lastly, Appellant does not dispute in its Memorandum of Appeal the fact of its

WHEREFORE, premises considered, the appeal is DENIED for lack of merit.

Economic Research & Information Department of the Commission for their information and appropriate action. Let a copy of this Decision be furnished to the Market Regulation Department and the

SO ORDERED.

22 August 2013, Mandaluyong City, Philippines.

TERESITA J. HERBOSA Chairperson

MA Commissioner JANITAE. CU ro MANUEL Commissioner BERTO B. GAITE

htairs Meute ..

Commishioner I.JALA ANTONIETA F. IBE Commissioner

13 Records, p. 102.