Monday, July 16, 2012

DOJ urged: File charges vs 8 foreigners

..THE Securities and Exchange Commission (SEC) has asked the Department of Justice (DOJ) to file criminal charges against eight foreigners for engaging in unlawful offering and sale of securities in the form of membership shares at the Nomad Sports Club (NSC). NSC, according to its website, is an exclusive sports club based in Merville Park, Paranaque, whose 513 members are mostly expatriates. It was first put up in 1914 to foster British sports in the Philippines, in particular football, which was popular in those days. In its pleading, the SEC, through Enforcement and Prosecution Department officer-in-charge Leila Laureta-Agustin and Securities counsel Jonathan Pancracius Paguirigan, asked the DOJ to dismiss the motion for reconsideration filed by respondents Jonathan Thorp, Thomas Whitwell, Alfonso Cervero, Matthew Freeston, Andrew Yates, Ian Sinclair, Keith Warne and Faisal Durrani-Khan. The expatriates, some of whom are also members of the club’s board of trustees, were earlier recommended for indictment for unlawfully offering and selling of membership shares of NSC to the general public through flyers, its website and at its office, in violation of the Securities Regulation Code (SRC) by DOJ. They, however, filed an motion for reconsideration seeking a reversal of the investigating prosecutor’s findings. But the SEC said the respondents failed to controvert the evidence against them, or raise new arguments to reverse the finding of probable cause by prosecutors that the foreigners violated the SRC, which merited the filing of criminal cases against them in court. The regulatory body insisted that there is strong evidence to prove that the respondents violated the securities regulation law. Citing Section 8 of the SRC, the SEC said the mere offering for sale or distribution of securities in the Philippines without a registration statement duly filed with and approved by the commission is prohibited. “It is clear from the above-quoted provision that aside from ‘sale’ of unregistered securities, a mere ‘offer to sell’ the same already constitutes a violation thereof. An offer to sell includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, for value. Hence, for purposes of incurring criminal liability under the above provision, it is not always essential that securities be actually sold or disposed of,” the SEC said. SEC also said that the respondents cannot claim that NSC’s membership shares cannot and should not be considered as securities that require prior registration before they can be sold to the general public on the ground that the club is a non-stock and non-profit corporation and not in any way engaged in profit-making activities. It pointed out that members of the sports club are entitled to use and enjoy the club facilities as listed in the Club House Rules, in consideration of the payment of a joining fee, the amount of which varies depending on the kind of membership applied for. Records showed that in 2009, the SEC found sufficient basis to the complaint filed by club members and filed charges at the DOJ for violation of Section 8 of SRC. After conducting preliminary investigation, the DOJ investigating fiscal on October 26, 2011 found probable cause to charge Thorp and other NSC officers with violations of the SRC, in connection with the unauthorized sale of securities in the form of membership shares. (JCV/Sunnex) ..