Stock market watchdog penalizes 15 brokers for customer protection and ethical breaches

By Eileen Mencias

The Capital Markets Integrity Corporation (CMIC), the surveillance arm of the Philippine Stock Exchange, has penalized 15 stockbrokers for various violations committed between December 29, 2023, and April 30, 2024.

CMIC president Gerard B. Sanvictores said the sanctions targeted breaches in areas like customer protection, accounting standards, supervision, and ethical conduct.

Ansaldo, Godinez & Company Inc. faced the most severe penalties with five major violations, including customer protection lapses, accounting irregularities, and failures in segregating functions and ethical standards.

They were also hit with four minor violations for errors, order aggregation, and short-selling regulations.

Market manipulation concerns led to a grave violation for Campos, Lanuza & Company Inc., which also faced sanctions for trader conduct and ethics.

Capitalization shortfalls were the major violation for MDR Securities Inc., Platinum Securities Inc., and Yu and Company Inc.

MDR received an additional penalty for supervision lapses, while Platinum faced sanctions for supervision, minimum commission rates, and customer order confirmation. Yu was also cited for supervision issues and breaches in record-keeping and board governance.

AP Securities faced a major violation related to supervising trading participants and a minor customer protection breach.

Belson Securities received two major citations, one for trading participant conduct and another for ethical codes governing traders and salesmen. They also had minor violations for trade amendments and error transactions.

Diversified Securities received a written reprimand for a minor violation concerning customer order confirmation.

Intra-Invest Securities was flagged for a major supervision lapse and two minor violations for trade amendments and record-keeping.

Lucky Securities was penalized for a major violation of ethical standards rules while Maybank Securities received a written reprimand for a minor breach of short selling regulations.

PNB Securities faced written reprimands for two minor violations involving trade amendments and client order aggregation.

Quality Investment & Securities Corp. was hit with a major supervision violation. Additionally, they received a written reprimand for a segregation of functions breach and fines for minor errors in transactions.

Regina Capital Development Corp. received a written reprimand and a fine for a major supervision violation coupled with five minor breaches related to order aggregation, customer protection, trade amendments, and error transactions.

UPCC Securities got a written reprimand for a minor customer order confirmation violation.

Bilyonaryo.com reached out to the trading participants involved, but only one, Lucky Securities Inc., responded, saying it had already paid the penalty.

Sanvictores said the cases have been resolved at the CMIC level but may be brought to the Securities and Exchange Commission or the courts for appeal.

Matters that have yet to be resolved by the CMIC Board of Directors and those that are still being appealed are not included in the list.