WHEN Congress reopens in May the Securities and Exchange Commission will submit a bill that should be acted on at once by the relevant committees, passed by both Houses and then enacted into law.
The SEC wants to have more powers to combat investment scams and prosecute the swindlers. This is good because it will both prevent victims from being illegally made to part with their money and will encourage investors who have been discouraged from playing in the stock market for fear of being victimized by scammers.
Our Business Times reported yesterday that SEC Chairperson Teresita Herbosa told reporters on Friday that she and her fellow commissioners “ see the need to go proactive with regard to curbing investment scams.”
She cited the system in the United States that triggers the attention of all agencies involved in watching for and fighting scams whenever there is a complaint.
Madam Herbosa said the system makes all the government agencies concerned with fighting this crime to “to take note of the complaint within 24 hours and be able to notify a recipient bank to stop the wire transfer.”
Right now the Securities Regulation Code (SRC), under which the SEC operates, only allows the Philippine security market’s regulator and monitoring body to issue advisories to discourage the public from taking part in irregular investment activities involving securities. The SEC’s only law enforcement power against swindlers is to issue cease and desist orders against persons and companies observed and alleged to be running an investment scam operation.
Madam Herbosa stressed the need for a law that grants the SEC the power order a halt to money transfers by strongly suspected and clearly identified scam operators.
With such a system, she explained, “ if the money is deposited by the investment scammer, having taken it from the victim and transferred it to some bank, then the recipient bank, upon the SEC’s express direction, could immediately stop the transaction” thereby allowing the money to go back to the victim.
These powers, SEC Chair Herbosa said, are just similar to the to those granted by law to the Bureau of Internal Revenue with regard to erring taxpayers and to the Anti-Money Laundering Council with respect to proceeds from illegal activities.
“The present SRC merely gives us the power to determine, define and limit the scope of what constitutes securities to fall under our jurisdiction,” she said, adding: “And it is only then that the agency may ascertain whether such activity should be stopped.”
“But the money invested by innocent victims could no longer be returned to them. Hence, we want to have that power similar to that of the BIR and AMLC.”
She said the lack of “power to be more proactive is the main reason why the victims do not come out. Why would they lodge a complaint when they can no longer recover their money?”
“In other instances, the money they have invested is already sent abroad, where the Philippines no longer has jurisdiction,” she added.
We strongly urge Congress to pass the SEC’s proposed law.