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SEC orders Ongpin out, imposes P174-m penalty

The Securities and Exchange Commission said Thursday it ordered the disqualification of former trade minister Roberto Ongpin from the board of any publicly listed company for allegedly committing insider trading in the sale of Philex Mining shares in 2009.

The SEC en banc also ordered Ongpin to pay a fine of P174 million, or P1 million each from alleged 174 counts of insider trading, based on Section 54.1 of the Securities regulation Code. The amount was higher than the P17.4-million fine recommended by SEC’s enforcement and investor protection department.  

The SEC said the decision to impose the maximum penalty would quell if not totally eliminate insider trading and other fraudulent manipulative devices and practices which create distortions in the free market.  It said a minimum penalty would send the wrong signal to the public that administrative penalties was not sufficient to quell fraudulent market activities.

Roberto Ongpin
Ongpin said in his response he did not commit any insider trading.  Ongpin also appealed EIPD’s decision finding him liable for committing 174 counts of insider trading.

With the en banc decision, the SEC ordered Ongpin to relinquish or resign from any or all positions he was holding as officer, member of the board of directors, or any similar functions in a public company or publicly listed company.

Ongpin currently sits as chairman of two listed companies, including PhilWeb Corp. and Atok Big Wedge Inc. 

“The imposition of the foregoing penalties [P174 million] is without prejudice to further investigation and the imposition of additional penalties by the commission, for any additional purchases of the unaccounted 17,982,250 Philex shares on the morning of 2 December 2009 by appellant,” SEC said in an order dated July 8, 2016.

The SEC investigation showed that during the week of Nov. 24, 2009, businessman Manuel Pangilinan representing the First Pacific Group and Ongpin entered into negotiations with respect to the possible purchase by the First Pacific group of Philex shares from the latter.

The parties settled on the selling price of P21 per share on Dec. 1, 2009.  In the morning of Dec. 2, 2009, Ongpin through his Golden Media Corp. purchased additional 45,964,500 Philex shares from the open market at P19.25  to P19.50 per share. The purchase involved 174 separate transactions.

The corporate regulator claimed that Ongpin had gained material information as a director and as selling shareholder of Philex when he acquired additional shares in the mining firm before Philex shares were sold to the First Pacific group.

SEC said PSETrade Ledger showed 174 transactions, which accounted for a total volume of 27,982,250 Philex shares out of the 45,964,500 shares admittedly purchased by Ongpin in the open market. 

“This means that 17,982,250 remain unaccounted for, and it is quite plausible that there are more than 174 transactions or violations of insider trading committed by appellant in the morning of 2 December 2009 which may have been purchased outside the PSE,” SEC said.

SEC’s EIPD issued a show cause order on Nov. 12, 2014 directing Ongpin to show cause why no administrative sanctions should be imposed on him for committing 174 counts of insider trading for the purchase of Philex shares on Dec. 2, 2009, which was allegedly in violation of Section 27.1 of the SRC.

Topics: Securities and Exchange Commission , SEC , Roberto Ongpin , Philex Mining shares
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