The Securities and Exchange Commission (SEC) wants to be given more powers to combat investment scams in order to prevent victims from losing their money.
“We see the need to go proactive with regard to curbing investment scams,” SEC Chairperson Teresita Herbosa told reporters last Friday.
“[I]n the US . . . they actually have a system which would trigger all agencies involved . . . to take note of the complaint within 24 hours and be able to notify a recipient bank to stop the wire transfer,” Herbosa added.
The Securities Regulation Code (SRC), she said, only allows the SEC to issue advisories discouraging the public from taking part in irregular investment activities involving securities as well as issue cease and desist orders against alleged scammers.
What is needed, Herbosa said, is a law that would allow the corporate regulator to seek a halt to money transfers.
“Such that if the money is deposited by the investment scammer, having taken it from the victim and transfer it to some bank, then the recipient bank, upon the SEC’s express direction, could immediately stop and not receive it so it goes back to the victim,” she explained.
Herbosa said the SEC wanted powers similar to those granted by law to the Bureau of Internal Revenue with regard to erring taxpayers and 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.
Herbosa said that the proposed amendment to the SRC would be submitted to Congress the moment it resumes its session in May.