Venture Securities Inc. (VSI) is challenging the Securities and Exchange Commission’s (SEC) revoking the stock brokerage firm’s license after it figured in the illegal transfer of shares of stocks from another stock broker into VSI by an errant employee, leading to the collapse of one of the oldest stockbroker in the country – R&L Investments Inc.
VSI chairman Eusebio Tanco said the investigation into Marlo Moron, an employee of R&L Investments “has unnecessarily dragged VSI.” Moron was found to have illegally transferred shares of R&L clients to the account of Julieto Sulapas, in VSI.
Tanco said records show that Moron, acting as both trader and settlement clerk, in violation of the SEC rules for a brokerage firm, executed EQ trades indicating he has the access code of R&L Investments to utilize the PCD system.”
“In addition, he was also in charge of keeping the books of accounts – a virtual one-man show fully in control of the various aspects of brokerage operations. This could not have happened except with the obvious knowledge and consent of the owners of R&L,” Tanco said.
The SEC in its decision said the anomaly resulted in the loss of P700 million worth of client shares in R&L and is a result of VSI and its officers failing to “observe know-your-client procedures and other controls mandated by Republic Act No. 8799, or the Securities Regulation Code (SRC) and its implementing rules and regulations (IRR).
Tanco argued the fraudulent transfer took place exclusively within R&L “and that no broker dealing with the shares of Mr. Sulapas would know that the shares do not belong to him.”
“Ventures was never involved in the fraudulent scheme of Mr. Moron and R&L and is, therefore, as much a victim as the clients of R&L,” he said.
Tanco said it was a complete surprise for VSI as it “has been made to appear as complicit in the anomalous schemes of Mr. Moron.”
