SEC must explain Ongpin’s 174 counts of insider trading



It is astonishing how fast the Securities and Exchange Commission concluded that Roberto V. Ongpin had engaged in 174 cases of insider trading. The commission proper or its unit had not defined what constituted insider trading. To arrive at their decision the commissioners upheld the ruling of SEC’s enforcement and investors’ protection department (EID) against Ongpin.

FOR the information of the public who trade on listed common shares of Philex Mining Corp., four members of the five-person regulatory body of the Securities and Exchange Commission ruled that businessman Roberto V. Ongpin has engaged in 174 cases of insider trading. They are Chairperson Teresita J. Herbosa and Commissioners Manuel Huberto B. Gaite, Ephyro Luis B. Amatong, and Blas James G. Viterbo.

Anonieta F. Ibe did not sign the en banc decision because she was “on leave.”

Anyone accessing SEC’s other rulings will find similar notations in some of them. More often than not, a commissioner did not sign a ruling because he/she was “on leave.” For instance, only three commissioners signed the SEC en banc decision on Nov. 26, 2015 in favor of Philippine Ecclesiastical Catholic Church Apostolic Vicar Incarnant Simbahang Katoliko Pilipino against Ferdinand B. Sales as director of the SEC’s company and registration department. They were Ibe, Amatong and Viterbo. Herbosa and Gaite did not sign that ruling because they were “on official business.”

174 insider-trading cases
The SEC had lost in June 2001 its adjudication functions over intra-corporate cases to regular courts designated by the Supreme Court. Naturally, it must have lifted off some volume of workload from the shoulders of the SEC commissioners. Still it is astonishing that how fast a ruling on the RVO case, which is one of a rare kind, was arrived at.

Let’s assume that it would take only a year to investigate an insider trading case. This would mean the SEC needed 174 years to investigate Ongpin for engaging in 174 counts of insider trading.

In deciding on the RVO case, Herbosa and three other SEC commissioners upheld the ruling of the commission’s enforcement and investors’ protection department (EID) against Ongpin. It is interesting to note that the commission proper or its unit had not defined what constituted insider trading. Despite this, Herbosa and her three fellow commissioners succeeded in finding Ongpin guilty of 174 cases of insider trading swiftly, whereas normally it would have taken decades to just investigate each of them.

By the way, will Herbosa, Gaite, Amatong, and Viterbo educate the public on what Ongpin’s violations were rather than simply reciting them in their future rulings, so that members of the public would be able to avoid committing similar offense when trading on listed stocks?

Hefty increase
In the olden days, the SEC chairman used to receive P35,000 a month while an associate commissioner was paid P25,000 a month. This was how much the lawyer, Perfecto R. Yasay Jr., got when he was with the SEC, first as one of the four commissioners and eventually as chairman.

When the Securities Regulation Code was amended in 2001, one of the amendments exempted the SEC from salary standardization. As a result, Chairperson Lilia Bautista became the highest-paid pensioner of the Government Service Insurance System when she retired from the SEC.

By 2009, the compensation for SEC’s top five officials totaled P7,781,193 with the chairperson Fe B. Barin receiving P2,664,425, commissioners Ma. Juanita E. Cueto, P1,832,379 and Raul Palabrica, receiving P1,832,379 each; Manuel Huberto Gaite receiving P1,452,010, and Eladio Jala who was a commissioner for only one month receiving P170,762.

Ask Yasay
At this point, I want to make a personal appeal to President Rodrigo Roa Duterte. Please ask Mr. Yasay whom you appointed foreign affairs secretary, how overworked he was first as an SEC associate commissioner and then as SEC chairman. Please ask him also how much of his total annual compensation was his basic salary. Perhaps, Mr President, you will be surprised by the numbers he would tell you.

Yasay was not as lucky as Herbosa, who was one of the government’s highest-paid officials. In the list of compensation for 2015 posted on COA placed her annual compensation at P9,801,270, which made her No. 3 among the heavies. She was beaten only by Amando M. Tetangco Jr., governor of the Bangko Sentral ng Pilipinas, with P13,957,395 and by Robert G. Vergara, president and general manager of the Government Service Insurance System with P13,449,294.

P35.9M for 5
The government spent a total of P35,925,954 for keeping Herbosa and company in its payrolls in 2015. Each of the three of the four commissioners got an annual compensation of P6,531,171 each in 2015. As general counsel, Camilo Santos Correa fell far behind with P2,769,678.

I don’t know how President Duterte would feel if told that the highest paid rank-and-file workers got P25,000 a month after securities law was amended in 2001.

What a gap! The public needs justifications of the SEC’s discriminatory compensation scheme. If the government can pay the five-person commission, it should review the compensation scheme and adjust the salaries of the SEC’s workers who are the front liners in the agency’s company registration and regulatory functions.


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