THE Social Security System executives involved in the stock trading mess should be compelled to disgorge all the personal profits they irregularly netted from the tips and concessions they obtained from the pension fund’s accredited stockbrokers, a lawmaker said Sunday.
“This is the right thing to do: For them to be constrained to empty out their pockets of their dishonest earnings. Those profits rightfully belong to and should go to the SSS,” said Surigao del Sur Rep. Johnny Pimentel.
He made the statement even as Eastern Samar Rep. Ben Evardone on Sunday urged the SSS to defer its plan to increase its member’s contributions.
Evardone, head of the House committee on banks and financial intermediaries, said there was a need to look into the anomalous stock trading of four SSS officials.
“The issue on this must be clarified. In the meantime, the proposed increase must be postponed,” Evardone told dzBB radio.
Pimentel, chairman of the House good government and public accountability committee, said SSS officials were mere guardians or trustees of the pension fund’s members.
“When a trustee engages in self-dealing, that trustee commits a serious violation of the fiduciary relationship with the fund owner or the principal,” Pimentel said.
He said it was a grave ethical breach for a trustee to take advantage of his or her position to make money for himself or herself.
“In fact, in other jurisdictions, pension fund trustees who do not voluntarily disgorge their earnings from self-dealing are immediately sued for the recovery of both the wrongful profits they earned and the principal’s lost profits,” Pimentel said.
The SSS has been hit by a scandal after senior executives overseeing the pension fund’s stock investments were found gainfully trading for themselves based on tips and other benefits, including lucrative initial public offering share allocations, they obtained from accredited brokers.
“We support Social Security Commissioner Jose Gabriel La Viña’s strong views on this matter. There should be no pussyfooting here. Heads must roll where they should,” Pimentel said.
La Viña said the erring executives availed themselves of valuable information and
IPO share allotments for themselves, instead of allowing their principal”•the SSS”•to take advantage of the tips and shares.
Companies use IPOs to list at the Philippine Stock Exchange for the first time so that their shares may be freely bought and sold in the open market.
La Viña filed the administrative complaint for “serious dishonesty and grave misconduct” against the four SSS executives implicated in the stock trading mess. Named respondents in the complaint were SSS executive vice president Rizaldy Capulong; senior vice president and chief actuary George Ongkeko Jr.; vice president Reginald Candelaria, OIC of equities investment division/capital markets group; and Ernesto Francisco Jr., equities product development head.
Ongkeko and Francisco have since resigned their posts, although acceptance of Ongkeko’s resignation has been deferred until the end of the year pending his completion of certain tasks.
Capulong and Candelaria have been suspended from their posts and temporarily reassigned to the Office of SSS president pending the resolution of the complaint against them.