SEC CDO Case No. 02-23-098 In the matter of: HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, REYMOND LACSAMANA GALANG, QUARRY QUIENG, AND ERWIN L. BANGALAN, ET. AL.

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance

In the matter of:

HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, LACSAMANA QUIENG, AND ERWIN L. BANGALAN. GALANG, REYMOND QUARRY SEC CD0 Case No. 02-23-098 Promulgated: 12 October 2023

ET. AL.

PROTECTION DEPARTMENT, ENFORCEMENT AND INVESTOR

Movant.

X

RESOLUTION

dated 3 April 2023, filed by Respondents Reymond L. Galang, Kim Mejica, Daniel Agbisit, Paul T. Maranan, JM Almodiente, Quarry Quieng, Erwin "Weng" Bangalan, and CJ Quinzon (the "Galang Group") on 04 April 2023; and (g) Entry of Appearance with Verified Urgent Motion dated 19 May Liao Pantollana (Mr. Pantollana),on 04 April 2023; (d) Verified Motion to Lift Cease and Desist Order dated 1 April 2023, filed by Respondents N. Cruz, Maricel R. Cesumision, Joseph J. Zabala, Maria Cecilia T. Viscayno. James Christopher T. Rojas (the "Martinada Group") on 04 April 2023; (e) 2023, filed by Respondent Stephen Cecilio A. Dorog ("Mr. Dorog") on 24 May 2023 (hereinafter collectively referred to as the "Motions to Lift"), Cease and Desist Order with Motion to Issue Clarification (of Respondent Verified Motion to Lift Cease and Desist Order dated April 2023, filed by Respondents Rhoda A. Casuga, Mikhaella D. Ty, Ariel R. Katigbak, Heinn Carreon Humilde, Zen Carreon Humilde, and Den Abad (the "Casuga Floresca (Spouses Floresca) on 30 March 2023; (b) Verified Motion to Lift Vanessa Magboo) dated 29 March 2023, filed by Respondent Vanessa M. Magboo (Ms. Magboo) on 11 April 2023; (c) Verified Motion to Lift Cease and Desist Order dated 1 April 2023, filed by Respondent Hector Aldwin Joseph G. Martinada, Ronaldo E. Renta, Neshemah Rock L. Renta, Avegail Group") on 04 April 2023; (f) Verified Motion to Lift Cease and Desist Order Lift Cease and Desist Order dated 28 March 2023, filed by Respondent Spouses Raffy Palangdan Foloresca and Jennylyn Galletes Delos Santosi For consideration of the Commission En banc are the: (a) Motion to

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL. SEC CD0 Case No.02-23-098 In the matter of: Page 2 of 19 Resolution

all praying for the issuance by the Commission of an Order lifting the Cease and Desist Order dated 16 March 2023 (the "Assailed CD0", the dispositive portion of which reads, in part, thus:

from further engaging in, promoting and facilitating selling PLAYERS CLUB, PHILIPPINE NATIONAL ESPORTS LEAGUE, TEAM Z, "MONSKI" LACSAMANA GALANG, QUARRY QUIENG, ERWIN "WENG" L. MAGBOO, GUMBA MARTINADA, RONALDO EMBING RENTA, NESHEMAH ROCK LORICO RENTA,MARICEL RAPOSON CESUMISION, CECILIA A. DOROG, ZEN CARREON HUMILDE, HEIN CARREON HUMILDE, RAFFY PALANGDAN FLORESCA, JENNILYN GALLETES DELOS SANTOS FLORESCA, RHODA ANDRADA CASUG, MIKHAELLA DAMASCO TY, ARIEL RAMOS KATIGBAK, and DEN ABAD, representatives, salesmen, solicitors, agents, uplines, enablers and influencers, and any and all persons claiming and acting for and in their behalf, are hereby directed to IMMEDIATELY CEASE AND DESIST and/or offering for sale securities in the form of evidence of indebtedness and/or other activities/transactions relative thereto, until the requisite registration statements are duly filed with and approved by the Commission, and the corresponding license and/or permit to offer/sell securities are issued. HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, REYMOND BANGALAN, KIM MEJICA, DANIEL AGBISIT, PAUL TOLENTINO MARANAN, JM ALMODIENTE, CJ QUINZON, VANESSA MENDOZA AVEGAIL NAMOC CRUZ, JAMES CHRISTOPHER TAN ROJAS, JOSEPH JUNIA ZABALA, MARIA CECILIA TABANO VIZCAYANO, STEPHEN "WHEREFORE, premisesconsidered, Respondents HORIZON

Respondents HORIZON PLAYERS CLUB, PHILIPPINE NATIONAL VANESSA MENDOZA MAGBOO, GUMBA MARTINADA, RONALDO HUMILDE, HEIN CARREON HUMILDE, RAFFY PALANGDAN FLORESCA, JENNILYN GALLETES DELOS SANTOS FLORESCA, RHODA ANDRADA CASUG, MIKHAELLA DAMASCO TY, ARIEL RAMOS KATIGBAK, and DEN ABAD, representatives, salesmen, solicitors, agents, uplines, enablers and influencers, and any and all persons claiming and acting for and in their behalf, are likewise directed to CEASE their transactions relative to the Casino Junket Operation covered by this Cease and Desist Order. criminal action against any persons or entities found to act as solicitors, ESPORTS LEAGUE, TEAM Z, HECTOR PANTOLLANA, ZEUS LIAO QUIENG, ERWIN "WENG" L. BANGALAN, KIM MEJICA, DANIEL AGBISIT, PAUL TOLENTINO MARANAN, JM ALMODIENTE, CJ QUINZON, EMBING RENTA, NESHEMAH ROCK LORICO RENTA, MARICEL CHRISTOPHER TAN ROJAS, JOSEPH JUNIA ZABALA, MARIA CECILIA TABANO VIZCAYANO, STEPHEN CECILIA A. DOROG, ZEN CARREON The Commission will institute the appropriate administrative and PANTOLLANA, REYMOND "MONSKI" LACSAMANA GALANG, QUARRY RAPOSON CESUMISION,AVEGAIL NAMOC CRUZ, JAMES

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL SEC CD0 Case No.02-23-098 In the matter of. Page 3 of 19 Resolution

information providers, salesmen, agents, brokers, dealers, or the like for and on their behalf.

CECILIA A. DOROG, ZEN CARREON HUMILDE, HEIN CARREON operators, directors, officers, salesmen agents, representatives, promoters, and all persons, conduit entities and subsidiaries claiming and acting for and on its behalf from transacting any business involving of which the named persons herein may have any interest, claim or custody, to ensure the preservation of the assets for the benefit of the Finally, the Commission hereby PROHIBITS Respondents HORIZON PLAYERS CLUB, PHILIPPINE NATIONAL ESPORTS LEAGUE, TEAM Z, HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, REYMOND "MONSKI" LACSAMANA GALANG, QUARRY QUIENG, ERWIN "WENG" L. BANGALAN, KIM MEJICA, DANIEL AGBISIT, PAUL TOLENTINO NESHEMAH ROCK LORICO RENTA,MARICEL RAPOSON CESUMISION, AVEGAIL NAMOC CRUZ, JAMES CHRISTOPHER TAN ROJAS, JOSEPH HUMILDE, RAFFY PALANGDAN FLORESCA, JENNILYN GALLETES DELOS SANTOS FLORESCA, RHODA ANDRADA CASUG, MIKHAELLA DAMASCO TY, ARIEL RAMOS KATIGBAK, and DEN ABAD, its partners, the funds covered by this CDO in its depository banks, and from transferring, disposing, or conveying in any manner, all assets, properties, real or personal, including but not limited to bank deposits, participation whatsoever, directly or indirectly, under its/their MARANAN, JM ALMODIENTE, CJ QUINZON, VANESSA MENDOZA MAGBOO, GUMBA MARTINADA, JUNIA ZABALA, MARIA CECILIA TABANO VIZCAYANO, STEPHEN investors." RONALDOEMBING RENTA

Motions to Lift pursuant to Section 1 Rule 311 of the Rules of Court, which applies suppletorily2, considering that they present a common question of law, i.e., whether the Assailed CDO should be lifted. On a procedural matter, the Commission has consolidated the

Investor Protection Department ("EIPD") filed before the Commission En Banc (the "Commission"), through the Office of the General Counsel, a Petition for Issuance of a Cease and Desist Order3 (the "Petition") against Team Z, Mr. Pantollana, Zeus Liao Pantollana, the Galang Group, Ms. Horizon Players Club (HPC), Philippine National Esports League (PNEL), The records show that on 20 February 2023, the Enforcement and

actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid 1 "SECTION 1. Consolidation. When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the unnecessary costs or delay." 2 SEC. 1-6, Rule I Part I of the 2016 Rules of Procedure of the Securities and Exchange Commission provides that: "The pertinent provisions of the Rules of Court may, in the interest of expeditious dispensation of justice and whenever practicable, be applied by analogy or in a suppletory character and effect." 3 Petition for Issuance of a Cease and Desist Order dated 21 February 2023.

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of. Page 4 of 19 Resolution

Casuga Group, (collectively referred to as the "Individual Respondents"). Magboo, the Martinada Group, Mr. Dorog, and, the Spouses Floresca, the

finding that HPC, PNEL, Team Z, and the Individual Respondents are engaged in the sale/offer of unregistered securities in the form of On 16 March 2023, the Commission issued the Assailed CD0 after

Section 8 of the Securities Regulation Code (SRC), in relation to Sec. inasmuch as they were executed in exchange for a considerably big evidences of indebtedness without the requisite license in violation of 3.1.17.2 of the 2015 Implementing Rules and Regulations of the SRC (the dated checks issued by HPC, PNEL, Team Z, and the Individual Respondents are securities in the form of evidences of indebtedness number of individual non-personalized loans obtained or solicited from the public. "2015 SRC-IRR"). In particular, the Commission found that loan and post-

Comment on the Respondents' Motion to Lift Cease and Desist Order and Motion for Extension of Time to File Comment (the "EIPD Motion"), praying for the grant of an additional period of fifteen (15) days within which to file a Consolidated Comment, on the ground that there are allegedly twenty-eight (28) respondents who have filed their respective pleadings, and it has yet to receive the relevant Order(s) from the Office of the General Counsel.4 On 19 April 2023, the EIPD filed a Motion to File Consolidated

Extension of Time to File Comment by the EIPD for allegedly being a prohibited pleading. They also argued that since the Motions to Lift were file its comment, the Assailed CDO was deemed lifted. Motion for Issuance of an Order Lifting the Cease and Desist Order against Respondent Spouses Floresca), therein opposing the Motion for not resolved after the lapse of the fifteen (15) day period for the EIPD to On 2 May 2023, the Spouses Floresca filed a Manifestation (with

Issue an Order Lifting the Cease and Desist Order dated 16 March 2023 Assailed CDo was automatically lifted due to the failure of the (the "Urgent Motions"), maintaining that under Sec. 64.3 of the SRC, the On 2 May 2023, the other Respondents5 filed an Urgent Motion to

Katigbak, Den Abad, Heinn Carreon Humilde, Zen Carreon Humilde and Vanessa Magboo; (C) Joseph G. Martinada, 4 Motion to File Consolidated Comment on the Respondents' Motion to Lift Cease and Desist Order and Motion for Extension of Time to File Comment dated 18 April 2023. Par. 2 Agbisit, Paul Tolentino Maranan, JM Almodiente and Cj Quinzon; (B) Rhoda A. Casuga, Mikhaella D. Ty, Ariel R. T. Vizcayno and James Christopher T. Rojas; and (D) Hector Aldwin Liao Pantollana 5 (A) Zeus Liao Pantollana, Reymond Lacsamana Galang, Quarry Quieng, Erwin L. Bangalan, Kim Mejica, Daniel Ronaldo E. Renta, Neshemah Rock L. Renta, Avigail N. Cruz, Maricel R. Cesumision, Joseph j. Zabala, Maria Cecilia

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, ERWIN L. BANGALAN ET AL. SEC CD0 Case No.02-23-098 In the matter of: Page 5 of 19 Resolution

Commission to set and conduct a hearing on the same. Respondent Magboo essentially adopted the foregoing argument, and posited that Sec. 4-3b, Rule IV of the 2016 Rules of Procedure of the Securities and Exchange Commission (the "2016 Rules") reiterates Sec. 64.3 of the SRc.

praying for the denial of the EIPD Motion for being a prohibited pleading under the 2016 Rules. They also reiterated their prayer to have the Assailed CDO lifted as to their persons. On 24 April 2023, the Spouses Floresca filed their Manifestation,

Motion was filed by Respondent Dorog, alleging that no evidence was presented to prove that he offered or sold securities to the public. On 24 May 2023, an Entry of Appearance with Verified Urgent

for the denial of the Motions to Lift for want of merit. On 4 May 2023, the EIPD filed its Consolidated Comment praying

the Assailed CDO pursuant to Section 64.3 of the SRC. (with Traverse to the Order dated August 23, 2023), arguing that the Order dated 23 August 2023 has been mooted by the automatic lifting of On 13 September 2023, the Spouses Floresca filed a Manifestation

they presented certifications attesting to their alleged lack of involvement, directly or indirectly, with PNEL9 and HPC.10 that the Assailed CDO should be lifted insofar as it covers them on the ground that they were denied their constitutional right to due process under Section 1 of Article 3 of the 1987 Constitution.8 They alleged that them of the proceedings. The Spouses Floresca equally maintained that involvement in the acts subject of the Assailed CDO. In support thereof, the Commission failed to conduct a proper investigation and to notify there was no substantial evidence presented which showed their In their Motion to Lift 7, Respondents Spouses Floresca maintained

for the finding that there is a violation of the securities law and that such violation poses a threat of grave or irreparable injury to the investing Respondent Magboo on the other hand claims that there is no basis

7 Motion to Lift Cease and Desist Order dated 28 March 2023. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied 6 Dated 19 May 2023. the equal protection of the laws 9 Motion (n2), Annexes "C", "C-1", and "C-2." 10 Ibid, Annexes "D" "D-1"" and "D-2."

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA. ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of. Page 6 of 19 Resolution

public. These, according to her, warrant the lifting of the Assailed CDO which was allegedly improvidently issued.11

complied with, in violation of their right to due process. On account issued without jurisdiction arguing that the SRC limits the authority of grantees of primary licenses;12 (b) their involvement in the sale/offer of unregistered securities or in the unlawful solicitation of investments was not proven by substantial evidence, as they did not transact with the complainants; and (c) the required investigation or verification was not thereof, the Martinada and the Galang Groups maintain that the lifting of the Assailed CDO is warranted. Groups maintained in their Motion to Lift that (a) the Assailed CDO was the Commission over corporations, partnerships, or associations who are For their part, Mr. Pantollana, the Martinada, Galang, and Casuga

as the evidence submitted in support of the same, the Commission finds and so holds that the Motions to Lift are bereft of merit. After carefully considering the arguments of Respondents, as well

A The jurisdiction Commission over has the

persons of the individual respondents.

Casuga Groups maintain that the Assailed CDO should be lifted as the same was issued without jurisdiction, inasmuch as it was directed to individuals and not to corporations, partnerships, or associations. They are in effect telling this Commission that a CDO can never be issued to an individual as this power was not granted under the SRC. In their Motions to Lift, Mr. Pantollana, the Martinada, Galang, and

Respondents are wrong.

the law specifically granted to the Commission, among which are as follows: Section 5 of the SRC, provides for the powers and authority which

functions provided by this Code, Presidential Decree No. 902-A, the "Section 5. Powers and Functions of the Commission. - 5.1. The commission shall act with transparency and shall have the powers and

11 Verified Motion to Lift Cease and Desist Order with Motion to Issue Clarification (of Respondent Vanessa Magboo) 12 Verified Motion to Lift dated 1 April 2023. Pars. 5 & 6 (page 3) dated 29 March 2023.Par. 27

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA. SEC CDO Case No.02-23-098 ERWIN L. BANGALAN ET AL In the matter of: Page 7 of 19 Resolution

Corporation Code, the Investments Houses Law, the Financing Company Act and other existing laws. Pursuant thereto the Commission shall have, among others, the following powers and functions:

XXX XXX XXX

( Regulate, investigate or supervise the activities of persons to ensure compliance;

XXX XXX XXX

(g compliance with such rules, regulation and orders; Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and provide guidance on and supervise

XXX XXX XXX

(n) the Commission to achieve the objectives and purposes of these laws." (Emphasis supplied) Exercise such other powers as may be provided by law as well as those which may be implied from, or which are necessary or incidental to the carrying out of the express powers granted

following State policies are implemented and achieved, to wit: were carefully and specifically included by the Congress to ensure that the The powers and authority granted in the afore-quoted provision

itself, encourage the widest participation of ownership in enterprises "The State shall establish a socially conscious, free market that regulates enhance the democratization of wealth, promote the development of the capital market protect investors, ensure full and fair disclosure about securities, minimize if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which Securities Regulation Code is hereby enacted."13 (Emphasis supplied) create distortions in the free market. To achieve these ends, this

which should always be used as a guide and reference point in all actions made relating to the interpretation and implementation of its provisions. In other words, the interpretation and implementation of the provisions protection to the investing public and in promoting the integrity of the of the SRC should be made in a manner that will ensure compliance therewith, consistent with the intent of Congress in affording ample capital markets. The afore-quoted provision embodies the raison d'etre of the SRC

implementing the provisions of the SRC and the SRC-IRR, the exercise of Prescinding from the foregoing, this Commission holds that in

13 Sec. 2 of the SRC

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA. ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of: Page 8 of 19 Resolution .

jurisdiction, prescribe different requirements for different classes of the regulatory powers, functions, and authority granted therein covers in authorizing the Commission to "regulate, investigate, or supervise the 5314 of the SRC categorically grants the Commission the authority to investigate any person who has violated or is about to violate its provisions, while Section 72.1 of the SRC15 expressly authorizes the classes of persons, securities or transactions, from any or all provisions of not only corporations but also natural persons who violate (or are about activities of persons to ensure compliance." In the same manner, Section Commission to "classify persons, securities, and other matters within its persons, securities, or matters, and by rule or order, conditionally or unconditionally exempt any person, security, or transaction, or class or to violate) its provisions. In this regard, Sec. 5(d) of the SRC is categorica this Code"

these natural persons subject of a CDO a remedy, to wit: CDO can be issued to natural persons, Sec. 64 of the SRC itself grants to More importantly, in recognition of the Congressional fiat that a

for a lifting thereof. xxx" "64.3 Any person against whom a cease and desist order was issued may, within five (5) days from receipt of the order, file a formal request

would place corporations in a position of disadvantage vis-a-vis the word "person" in the afore-quoted provisions only means that placed under the supervisory, regulatory, and investigative powers of the Commission the moment they engage in any activity or transaction that is covered by the SRC to ensure compliance. A different interpretation Congress clearly intended that both natural and juridical persons are Applying the rule of statutory construction16, the unqualified use of

registered securities association, clearing agency, other self-regulatory organization, and may require or permit 14 SECTION 53. Investigations, Injunctions and Prosecution of Offenses. discretion, make such investigations as it deems necessary to determine whether any person has violated or is about to violate any provision of this Code, any rule, regulation or order thereunder, or any rule of an Exchange. any person to file with it a statement in writing, under oath or otherwise, as the Commission shali determine, as 15 "This is a general provision intended to make clear that the SEC's authority to adopt rules extends to all Sections of the Code not just where specific order power is set out. The Department of Justice thus ruled that the provision should not be interpreted to limit the exemption to the directory provisions of the Code only, but government agency to provide the detailed rules, regulations, and exemptions in regulating securities transactions 16 "Where the law does not distinguish, we should not distinguish." (Forest Hills Golf and Country Club. Inc. v. Kings Properties Corp.. G.R. No. 212833 [Notice).[August 7, 2019] to all facts and circumstances concerning the matter to be investigated xxx. should be construed to include exemptions from its mandatory and prohibitory provisions in order to give way to public interests. The SEc, however, in the exercise of the authority to promulgate rules and regulations, has to ensure that the rules conform to, and implement, the declared State policy enunciated in Sec. 2 of the Code. The exemptive powers given to the SEC is a legislative recognition of the complexity and ever changing nature of the capital market and the impossibility of foreseeing all possible situations and contingencies that cannot be addressed in advance, necessitating delegation of legislative function to the SEC as the most suitable and qualified without the need of legislative amendment." (D0J Opinion No. 45, Series of 2001, dated 12 September 2001) 53.1. The Commission may, in its

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA. SEC CDO Case No.02-23-098 ERWIN L. BANGALAN ET AL In the matter of: Page 9 of 19 Resolution

individuals who can carry-out activities and perform transactions which are regulated under the SRC, directly, or indirectly, without having to be accountable for the same.

issue the Assailed CDO against their persons is clearly bereft of any legal for the protection of investors, among others, is a mandate that has been refuses to comply does not remove him/her from the jurisdiction of the Commission; neither will it insulate him/her from appropriate sanctions provided by law. Thus, the Commission correctly took cognizance of the instant case and issued the Assailed CDo against the individual respondents who were found to be engaged in the sale/offer of Galang, and Casuga Groups that the Commission has no jurisdiction to basis. The implementation and enforcement of the provisions of the SRC 5(d) of the SRC, the fact that it is an individual person who violates and/or unregistered securities without the requisite license. entrusted exclusively to the Commission. By express provision of Sec. On account thereof, the argument of Mr. Pantollana, the Martinada.

that limits the jurisdiction of the SEC to registered corporations, partnerships, or associations runs counter to its express provision and betrays/negates the spirit and the objectives which these laws seek to efficient, and credible capital markets can only be possible in a regulatory supervision or subjected to investigation by the SEC to ensure compliance or penalize any violation. This is what the SRC has clearly uphold and achieve. It cannot be gainsaid that effective, reputable. regime where the activities of persons are placed under the regulatory ordained. An interpretation of the SRC and Revised Corporation Code (RCC)

B. The Respondents were not

denied of their right to due process.

and should thus be lifted on the ground that it was issued without the required investigation or verification. Specifically, Respondents bewail opportunity to a fair hearing and to present their defense.17 For their part, the alleged failure of the EIPD and this Commission to afford them the Individual Respondents also argued that the Assailed CDO is infirm

see also Verified Motion to Lift Cease and Desist Order dated 1 April 2023 filed by the Casuga Group. Pages 4 and 5 Motion to Lift Cease and Desist Order dated March 28, 2023 (Pages 3 and 4) 17 Verified Motion to Lift Cease and Desist Order dated 1 April 2023 filed by the Martinada Group. Pages 4 and 5: see also Verified Motion to Lift Cease and Desist Order dated 1 April 2023 filed by the Galang Group. Pages 4 and 5: Verified Motion to Lift Cease and Desist Order dated 1 April 2023 filed by Mr. Pantollana. Pages 4 and 5; see also

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of: Page 10 of 19 Resolution

the Spouses Floresca emphasized the failure of the EIPD to inform them of the complaints filed against them, which deprived them of the opportunity to address the same.18

basis. Respondents' arguments are misplaced and devoid of any legal

act/transaction that may warrant the issuance of a CDO as confidential, classifies any investigation or compiaint filed in relation to an to wit: At the outset, Sec. 64.2 of the SRC categorically mandates and

"Until the Commission issue a cease and desist order, the fact that an investigation has been initiated or that a complaint has been Commission shall make public such order and a copy thereof shall be immediately furnished to each person subject to the order." (Emphasis supplied) confidential. Upon issuance of a cease and desist order, the filed. including the contents of the complaint. shall be

authority nor the discretion to divulge to anybody any investigation or unhampered by dilatory schemes which may be employed by the persons involved, for the protection of the investing public. This finds support in complaint filed with it that may eventually result in the issuance of a CDO The purpose of the law in requiring that the investigation or complaint filed be kept confidential is to ensure that the Commission promptly acts on the matter and exercises the appropriate regulatory authority the case of Primanila Plans, Inc. v. Securities and Exchange Commission,19 (the "Primanila Plans Case") where the Supreme Court emphasized the significance/importance of denying potential subjects thereof of any participation in the investigation, thus: Under the afore-quoted provision, the Commission is bereft of any

investigation conducted by the Commission prior to the cease and given the reasonable opportunity to present its defense. Primanila was able to do this via its motion to reconsider and lift the cease desist order's issuance. Given the circumstances, it was sufficient for the satisfaction of the demands of due process that the company was amply apprised of the results of the SEc investigation, and then and desist order. After the CED filed its comment on the motion, Primanila was further given the chance to explain its side to the SEc through the filing of its reply. "Trite to state, a formal trial or hearing is "The SEC was not mandated to allow Primanila to participate in the

18 Motion to Lift Cease and Desist Order dated March 28, 2023 (page 4) 19 G.R. No. 193791, August 6, 2014, 732 SCRA 264.

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, ERWIN L. BANGALAN ET AI SEC CDO Case No.02-23-098 In the matter of. Page 11of 19 Resolution

not necessary to comply with the requirements of due process. Its essence is simply the opportunity to explain one's position." (Emphasis supplied

denied due process because they were not informed of or provided copies of the complaint(s) filed against them, and/or were not involved in the investigation conducted by the EIPD/Commission, must fail as it clearly runs counter to, and violates Sec. 64.2 of the SRc. On the basis thereof, Respondents' insistence that they were

however recognize and afford persons or entities subject of a CDO the to lift, which is a remedy available to them after the CDO is issued. This opportunity to present their defense(s) in their formal request or motion satisfies the due process requirement. The foregoing notwithstanding, both law and jurisprudence

the opportunity to explain his/her side or the opportunity to seek rule emphasized and applied in the case of Ledesma v. Court of Appeals21, administrative in nature, where the rules and principles governing administrative proceedings apply. In this regard, the rule established in jurisprudence is that administrative due process is satisfied where the notice requirement and the opportunity to be heard, either through oral arguments or pleadings, are complied with,2 and the respondent is given reconsideration of the action/ruling that is being assailed. We find this thus: It must be emphasized, however, that the instant case is

situations require a trial-type proceeding. Due process is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. The essence of due process is simply to be heard, or as applied to administrative proceedings, an reconsideration of the action or ruling complained of. "Due process, as a constitutional precept, does not always and in-all opportunity to explain one's side, or an opportunity to seek a

and supplemental/responsive pleadings, where they presented their defenses and arguments to support their position that the Assailed CDO should be lifted. These are the very matters and issues that are being In the instant case, Respondents filed their respective Motion to Lift

20 Vivo vs Philippine Amusement and Gaming Corporation (G.R. No. 187854, November 12, 2013) 21 G.R. No. 166780, December 27, 2007, 541 SCRA 444.

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, ERWIN L. BANGALAN ET AL SEC CD0 Case No.02-23-098 In the matter of. Page 12 of 19 Resolution

Respondents fully availed of the remedy provided under Sec. 64.3 of the considered and passed upon in the instant Resolution. In short, SRc. They cannot therefore claim that they were denied their day in court.

investigation requirement, a fact that was clearly spelled out therein, under Sec. 64.2 of the SRC was not conducted in the instant case, this Commission finds the same to be devoid of factual basis. A perusal of the Assailed CDO will readily disclose that the EIPD complied with the thus: Anent the Respondents' allegation that the investigation required

Respondents warrant the issuance of a CDO because the same will "In the instant case, the foregoing requisites were met. The EIPD Petition, i.e., Certifications from the Commission's CRMD, MSRD and CGFD; the Contracts of Loan which were duly certified by the RTC of La Trinidad, Benguet, and the affidavits of the complainants. More importantly, this Commission is convinced that evidence on record which showed the unauthorized investment-taking activities of the operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice to the investing public, if not restrained. This finding is supported by the fact that Respondents admitted to carrying out a ponzi scheme which was affirmed by the Certifications of the CRMD, MSRD and CGFD." (Emphasis supplied) conducted an independent investigation which resulted in the gathering and presentation of evidence that supported its

complies with a statutory mandate could possibly prosper. evidence mentioned therein negates Respondents' allegation that nd investigation was conducted prior to the issuance of the Assailed CDo. Respondents however lament their exclusion from participating in the investigation and consider themselves as having been denied of due process. Sadly, Respondents' argument and position are misplaced. As mentioned earlier, the exclusion of Respondents in the investigation is expressly mandated by law and affirmed in jurisprudence. Thus, no allegation of violation of due process arising from an act that fully The afore-quoted finding which is duly supported by the pieces of

C. The Assailed CDO was not

CDO is not vet terminated. automaticallylifted: the proceedings on the Assailed

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, ERWIN L. BANGALAN ET AL. In the matter of.

SEC CD0 Case No.02-23-098 Page 13 of 19 Resolution

Respondents invoked and zeroed-in on Sec. 64.3 of the SRC in advancing their position that the Assailed CDo was automatically lifted. to Lift were filed. Hence, they argued that under Sec. 64.3 of the SRC, Respondents claim that no notice or hearing was set after the Motions such failure operated to automatically lift the Assailed CDO after the In their Motions to Lift and the subsequent Urgent Motions,

lapse of the 10-day period.

We do not agree with Respondents.

SRC and the SRC-IRR, it is imperative to ALWAYS go back to the declared Sec. 2 of the SRC specifically ordains the State to establish a socially conscious, free market that regulates itself. encourage the widest participation of ownership in enterprises, enhance the democratization of wealth, promote the development of the capital market, protect totally eliminate insider trading and other fraudulent or manipulative State policies which underlie the very purpose for which the law was enacted. These State policies provide coherence, meaning, and direction to the various provisions of the SRC which the Commission is mandated to implement. As quoted earlier in this Resolution, and it is worth to reiterate the same due to its paramount importance and significance investors, ensure full and fair disclosure about securities, minimize if not devices and practices which create distortions in the free market. For a correct and proper interpretation of the provisions of the

interpreting its provisions, to ensure that they are effectively carried Court emphasized that Section 2 of the SRC which embodies the core principles of the securities laws of the country should be considered in out, thus: In the case of Palanca IV v. RCBC Securities, Inc.22, the Supreme

seven core principles of our securities regulation laws: self- regulation, encouragement of the widest participation of ownership in "It has been observed that the afore-quoted provision lays down enterprises, enhancement of the democratization of wealth, promotion of capital market development, protection of investors, ensuring full and fair disclosure about securities, and minimization, if not total elimination, of insider trading and other fraudulent or manipulative devices and practices that create distortions in the free market, with the unifying principle being the protection of investors. These core principles animate the whole of the SRC; and as such, any doubt or conflict in the interpretation of the SRC and its implementing rules

22 G.R. No. 241905, [March 11, 2020].

HECTOR PANTOLIANA. ZEUS LIAO PANTOLLANA In the matter of.

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 Page 14 of 19 Resolution

must be resolved in a manner that will carry out the foregoing disclosure, investor protection, and the elimination of fraudulent or manipulative devices and practices." (Emphasis supplied) principles in mind, giving particular attention to the principles of full principles. We therefore resolve the issues before Us with these

protection was specifically identified by the High Court as the unifying in a way that will promote and achieve such purpose. This principle finds Resources Corporation23, where the Honorable Supreme Court emphasized that in implementing a statute, the Commission is mandated the subject of, or at issue in the instant case, should thus be interpreted support in the case of Securities and Exchange Commission v. Interport to effectuate its general policies, to wit: principle, the various provisions of the SRC, specifically Sec. 64 which is Bearing in mind that under the afore-quoted doctrine, investor

assert for themselves a more extensive prerogative or deviate from the mandate of the statute." (Emphasis supplied) power to promulgate rules and regulations to implement a given regulations conform to the terms and standards prescribed by the statute as well as purport to carry into effect its general policies. Nevertheless, it is undisputable that the rules and regulations cannot "It is well established that administrative authorities have the statute and to effectuate its policies, provided such rules and

which has for its goal the protection of investors. Only from such a thereof must therefore be anchored on the unifying principle of the SRC perspective can Sec. 64 of the SRC truly have meaning and significance; as faithfully performing its mandate. Consistent with the foregoing, the CDO which is essentially to curtail fraud and prevent injury upon the and only from such perspective can the Commission be truly considered Supreme Court emphasized in the Primanila Plans Case the purpose of a investing public, thus: The power of the Commission to issue a CDO and the purpose

"The law is clear on the point that a cease and desist order may be issued by the SEC motu proprio, it being unnecessary that it results from a verified complaint from an aggrieved party. A prior hearing is also provision, as any delay in the restraint of acts that yield such results can only generate further injury to the public that the SEc is obliged to protect." (Emphasis supplied) issue a cease and desist order that aims to curtail fraud or grave or irreparable injury to investors. There is good reason for this not required whenever the Commission finds it appropriate to

23 SEC v. Interport Resources Corporation (G.R. No. 135808. October 6, 2008)

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of: Page 15 of19 Resolution

substantial evidence, that a person has committed or is about to commit conveniently be negated. This will open the floodgates to scams by investing public by taking advantage of an automatic lifting of a CDO by a mere lapse of time. Such was clearly not the intent of the law. or upon a complaint, if it finds or has a reason to believe based on any act or practice that constitutes a violation of the SRC and/or the SRC- IRR24, to protect investors and to prevent fraud/injury that they may threat/possibility that a violation will be committed, the CDO issued by the Commission should and must continue to have full force and effect. otherwise the purpose for which Sec. 64 of the SRC is in place will scheming fraudsters and con artists who can conveniently prey on the possibly sustain. Necessarily, as long as the violation subsists or the Thus, the Commission is duty-bound to issue a CDO, motu proprio.

insisted on a myopic interpretation of the word "hearing" i.e. as a for the reason that on the said date, the proceedings were not yet terminated. In this regard, We are mindful of how Respondents firmly circumstance where parties confront each other, to support their position negates the intent and purpose of Sec. 64 of the SRC. that the Assailed CD0 was never automatically lifted on 29 April 202325 because it betrays the legal concept of a hearing, but equally so because it that none was conducted which resulted in the automatic lifting of the Assailed CDo. This position is however patently erroneous not only Moreover, it should be emphasized, and this Commission so holds

law specifically excluded their involvement or participation in the Rules26 requiring liberal construction with its provisions, as well as the established rule in administrative proceedings that technical rules of procedure are not strictly applied.27 Thus, in the case of Perez vs under Sec. 64 of the SRC vis-a-vis Sec. 4-3 Rule IV Part II of the 2016 Rules is broad enough to cover the entire proceeding on the CDO which affords investigation proceedings. This is consistent with Sec. 1-4 of the 2016 parties the opportunity to present their defenses, considering that the Contrary to the position of Respondents, the concept of a hearing

25 Manifestation dated May 1, 2023. Par. 9 24 See Sections 53.3 and 64 of the SRC on the concept of CDO. 26 "These Rules shall be liberally construed and administered to promote public interest, to secure a just, prompt, expeditious, and inexpensive determination of every action and proceeding before the Commission and to carry 27 "Administrative tribunals exercising quasi-judicial powers are unfettered by the rigidity of certain procedural strictly applied and administrative due process cannot be fully equated with due process in its strict judicial sense." (Samalio vs Court of Appeals. G.R. No. 140079. March 31, 2005) out the objectives of the laws it is mandated to implement. requirements, subject to the observance of fundamental and essential requirements of due process in justiciable cases presented before them. In administrative proceedings, technical rules of procedure and evidence are not

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of: Page 16 of 19 Resolution

sense to cover an entire proceeding instead of a single rigid proceeding. that in administrative proceedings, the term "hearing" is used in a general Philippine Telegraph and Telephone Company28, the Supreme Court ruled to wit:

couched in general language revealing the legislative intent to give some degree of flexibility or adaptability to meet the peculiarities of a formal hearing will defeat its spirit. "The standard for the hearing requirement, ample opportunity, is given situation. To confine it to a single rigid proceeding such as a

evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. "To be heard" does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings." (Emphasis supplied) A hearing means that a party should be given a chance to adduce his

was conducted, contrary to the claim of Respondents. In this regard, this circumstances, Respondents' reliance on Sec. 64.3 of the SRC was clearly Perforce, there was no automatic lifting of the Assailed CDO to speak of. the time the first Motion to Lift was filed which continued until the case was submitted for resolution. More importantly, the fact that Respondent such hearing was terminated on 29 April 2023. Given these factual misplaced as the hearing on the Assailed CDO was not yet terminated. parties, as well as the issuance of relevant processes by the Commission clearly show that a hearing (as described in the afore-quoted doctrine) Commission notes of the successive filing of pleadings by the parties from Magboo filed her Motion for Automatic Lifting of Cease and Desist Order only on 18 September 2023 equally belies the claim of Respondents that Verily, the filing of Motions to Lift and other pleadings by the

D trounce the evidence which showed Respondents sold/offered securities unregistered without that failed they the to

Commission. required license from the

Respondents were selling/offering unregistered securities in the form The Assailed CDO was issued on the basis of Our finding that

28 G.R. No. 152048. April 7, 2009

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA. ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 In the matter of: Page 17 of 19 Resolution

evidences of indebtedness without the required license. Specifically, the Respondents used involved the execution of a contract of loan with evidence presented by the EIPD showed that the scheme which the

investors covering an aggregate amount of about PhP114,000,000.00

consisting of the provision of luxury travel, accommodation, and related services to high-roller casino players.29 annum of the loaned/invested amount and issued post-dated checks as security. Respondents' representation to the investing public was that the loaned amount will be used to finance their junket operations where the latter are promised a return ranging from 60% to 111% per

were selling/offering unregistered securities to the public, which was will not suffice to tilt the scales in their favor applying the rule of evidence that bare allegation is not proof.31 The same is true with their allegation inasmuch as they are being subjected thereto in their personal capacity, therein being substantial evidence of their involvement/participation in the unauthorized investment-taking activities subject thereof. pleadings filed by the Respondents, this Commission finds and so holds that there was nothing therein that controverted the finding that they established by substantial evidence. Respondents' bare denials of any involvement in the unauthorized and fraudulent investment scheme3o that they are not connected with the entities named in the Assailed CDO After a careful examination of the Motions to Lift and related

Respondents, including the Spouses Floresca, respondents Magboo and PNEL which are co-respondents in the instant case. In fact, the unauthorized investment scheme subject of the Assailed CDO is being participated, promoted, propagated, and/or contributed in furthering Felipe to be part of the operations of TEAM Z, Horizon Players Club, and pictures in their Affidavit-Complaint dated 3 October 2022.32 The Commission is cognizant, based on the evidence presented, that the perpetrated collectively by the Respondents herein who necessarily have Dorog were positively identified by the complainants Tibiranca and De complainants positively identified respondents and attached their Relative thereto, the evidence presented by the EIPD shows that

allegations that are not admitted, setting forth, if practicable the matters relied upon to support the denial." 29 Cease and Desis Order. See page 6 3o See Motions to Lift of the Martinada, Galang, and Casuga Groups (page 4) 31 "Well-settled is the rule that denials, if unsubstantiated by clear and convincing evidence, are negative and self- serving which merit no weight in law and cannot be given greater evidentiary value over the testimony of credible (Carpio vs Valmonte. G.R. No. G.R. No. 151866, 9 September 2004) 32 See pars. 1.11, 1.22, 1.23, 38, and 39 A denial does not become "specific" merely because it is qualified by that word, but because it specifies the witnesses who testify on affirmative matters

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA. ZEUS LIAO PANTOLLANA ERWIN L. BANGALAN ET AL. SEC CDO Case No.02-23-098 In the matter of. Page 18 of 19 Resolution

the denial of the Motions to Lift. grand scheme; and the absence of any controverting evidence justifies their collective (as well as individual) objectives. Hence, the fact that other Respondents are not signatories to the loan agreements, or the post-dated checks does not justify their exemption from the coverage of the Assailed CDO. This Commission takes administrative notice of the fact that it is normal and even necessary for the participants of a fraudulent scheme to assume/take on different roles and responsibilities in carrying the same out. The establishment of the unauthorized investment scheme and the positive identification of the Respondents as participants of this

not what the law intended. In the instant case, more than a mere possibility of violating the SRC, Respondents were shown to have been violating the same. promote the integrity of the capital market. The Commission is not expected to wait until the investing public actually suffers damage, or the CDO whenever it has reasonable grounds to believe based on substantial evidence that the provisions of the SRC and/or the SRC-IRR will be violated. A contrary position does not only run counter to the very nature, capability of the Commission to effectively perform its mandate. This is capital market is compromised. The Commission is duty-bound to issue a purpose, and function of a CDO, it also seriously undermines the A FINAL NOTE. The function of a CDO is to protect investors and to

Christopher T. Rojas (the "Martinada Group") on 04 April 2023; (e) Carreon Humilde, Zen Carreon Humilde, and Den Abad (the "Casuga Group") on 04 April 2023; (f) Verified Motion to Lift Cease and Desist Order dated 3 April 2023, filed by Respondents Reymond L. Galang, Kim Mejica, and Desist Order dated 28 March 2023, filed by Respondent Spouses Raffy Palangdan Foloresca and Jennylyn Galletes Delos Santos-Floresca and Desist Order with Motion to Issue Clarification (of Respondent Vanessa (Ms. Magboo) on 11 April 2023; (c) Verified Motion to Lift Cease and Desist Order dated 1 April 2023, filed by Respondent Hector Aldwin Liao Pantollana (Mr. Pantollana),on 04 April 2023; (d) Verified Motion to Lift Martinada, Ronaldo E. Renta, Neshemah Rock L. Renta, Avegail N. Cruz, Maricel R. Cesumision, Joseph J. Zabala, Maria Cecilia T. Viscayno, James Verified Motion to Lift Cease and Desist Order dated April 2023, filed by Respondents Rhoda A. Casuga, Mikhaella D. Ty, Ariel R. Katigbak, Heinn (Spouses Floresca) on 30 March 2023; (b) Verified Motion to Lift Cease Magboo) dated 29 March 2023, filed by Respondent Vanessa M. Magboo Cease and Desist Order dated 1 April 2023, filed by Respondents Joseph G. WHEREFORE, premises considered, the (a) Motion to Lift Cease

REYMOND LACSAMANA GALANG, QUARRY QUIENG AND HECTOR PANTOLLANA, ZEUS LIAO PANTOLLANA, ERWIN L. BANGALAN ET AL SEC CDO Case No.02-23-098 n th Page 19 of 19 Resolution C1

and (g) Entry of Appearance with Verified Urgent Motion dated 19 May "Weng" Bangalan, and CJ Quinzon (the "Galang Group") on 04 April 2023; Daniel Agbisit, Paul T. Maranan, JM Almodiente, Quarry Quieng, Erwin 2023, filed by Respondent Stephen Cecilio A. Dorog ("Mr. Dorog") on 24 May 2023) are hereby DENIED for lack of merit. The Cease and Desist Order dated 16 March 2023 is hereby made PERMANENT.

Let a copy of this RESOLUTION be (a) posted in the Commission's

Monitoring Department, Corporate Governance and Finance website; and (b) be furnished to the Company Registration and

Department, and the Information and Communications Technology Department of this Commission, the Bangko Sentral ng Pilipinas, the

and the Department of Information and Communications Technology, for their information and appropriate action. Department of Trade and Industry, the National Privacy Commission,

FURTHER DIRECTED to submit a formal compliance report, by way of a pleading, to the Commission En Banc WITHIN TEN (10) DAYS from The EIPD, in coordination with other concerned departments, is

receipt of this Resolution.

SO ORDERED.

Makati City, Philippines.

EMILIO B AQUINO

Chairperson

JAVEY PAUL D. FRANCISCO Commissioner KELVIN LESTER K. LEE Commissioner

Commiissioner KARLO S.BELLO MCJILL BRYANT T. FERNANDEZ Commissioner