Corporate regulator sues Legacy owners, officers for securities fraud
Feb. 18, 2009
MANILA, Philippines – The Securities and Exchange Commission (SEC) has sued the owners and officials of Legacy Consolidated Plans, Inc. before the Department of Justice (DoJ) for engaging in the fraudulent sale of securities to the public.
“Despite the lack of the required registration and license to offer and sell securities to the public, Legacy and the individual respondents operated their business and engaged in a series of fraudulent and deceitful transactions to the damage and prejudice of the complainants-investors,” the corporate regulator said in a 21-page complaint-affidavit.
Named respondents were owner Celso G. de los Angeles, Jr.; President and Chairman Carolina Hinola; board directors Elvira P. Garcia, Cecille Invencion, Madeline Cobarrubias, Bishop Ignacio Soliba, and Monina Vierneza-Dio; Senior Vice-President for Legal Christine Cruz-Limpin; Corporate Secretary Edgardo M. Marasigan; Assistant Vice-President for Finance Elvira Nebre; Assistant Vice-President for planning Teresita Tica; auditor Josefina Castaneda; Assistant Vice-President for administration Agnes Santiago; and Chief Finance Officer Namnama Pasetes.
The SEC also asked prosecutors to place the respondents on the Immigration watch list.
The regulator said it had only allowed Legacy to sell pre-need plans, but “the investment scheme of Legacy falls squarely within the ambit of an investment contract.” These contracts were plain securities, which under the Code must be registered with the SEC, it said.
Legacy sales agents allegedly solicited money from clients to invest in products that promised high returns, including mutual funds and other bank products.
Some of the products promised to double investors’ money, the SEC said. The investors were then given documents bearing the names of different companies also within Legacy group, it added.
“[The] respondents knew fully well that the representations and promises they had made to the complainants-investors [were] all false and could not be realized. Proof of this [was] the fact that Legacy had abruptly closed its offices and filed for dissolution before the SEC,” it said.
But before a company could close shop, it must first inform the corporate regulator about it.
“And now, the investors could not retrieve not only the promised interest but the principal amount of their investments as well,” the commission said.
These were all in violation of the Securities Regulation Code and the Corporation Code of the Philippines.
If found guilty, violators will be fined P50,000 to P5 million or imprisoned for seven to 21 years. If the offender is a corporation, partnership or association, the penalty may be imposed on its officers. — Ira P. Pedrasa, BusinessWorld
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