Venture Securities Incorporated (VSI) is exhausting all legal remedies to prove it has not broken regulators’ rules amid the cancellation of its license.
Its license was canceled over the stock market scandal which also led to the collapse of another brokerage firm, R&L Investments.
The scandal, which broke in 2019, involved an employee of R&L, acting as trading floor assistant and settlement clerk, who stole over P700 million worth of its inventory of stocks by forging documents and transferring shares to VSI. The scheme was executed from 2012 to 2019.
The Securities and Exchange Commission (SEC) has since revoked the license of both R&L and VSI, and slapped fines amounting to P25 million and P32 million, respectively.
In a statement on Tuesday, June 15, Venture Securities said it is not the “proximate cause of any fraud” which led to the collapse of R&L.
“The case against Ventures stemmed from fraudulent acts committed solely within R&L. Records show that a certain Marlo Moron, acting as both trader and settlement clerk, in violation of the SEC rules for a brokerage firm, with the obvious consent of the owners of R&L, executed the EQ trades. This means he had the access code of R&L to utilize the PCD (Philippine Central Depository) system,” said Venture Securities president Wilfred Racadio.
“With the access code, Mr. Moron transferred clients’ shares to one Julieto Sulapas. Thus, any broker dealing with R&L will not know that the shares of Mr. Sulapas are not his. This fraudulent scheme took place exclusively within R&L. EQ trades are normal transactions in the stock exchange. Ventures had no inkling about the fraudulent schemes of Mr. Moron. Ventures is as much a victim as the clients of R&L.”
VSI also pointed out that Capital Markets Integrity Corporation, whose duty is to audit brokers and make sure that fraudulent acts do not occur, “has not called the attention of R&L to anomalies being committed which can be easily discovered.” – Rappler.com