The Court of Appeals has sustained its earlier decision that exonerated businessman Roberto Ongpin of 174 counts of insider trading involving Philex Mining Corp. shares back in 2009.
In a five-page resolution, the CA’s Special Thirteenth Division through Associate Justice Ma. Luisa Quijano-Padilla denied the motion for reconsideration filed by the Enforcement and Investor Protection Department of the Securities and Exchange Commission of its Dec. 1, 2017 decision which reversed and set aside the agency’s decision issued on July 8, 2016 finding Ongpin liable for insider trading.
The appellate court junked the arguments of SEC that its findings that Ongpin committed insider trading were supported by substantial evidence.
According to the SEC, being a quasi-judicial body, its findings should be conclusive and binding upon the court.
The commission also claimed that all the elements of insider trading were established during its investigation, thus, Ongpin was properly meted out the penalty of P174 million fine for 174 counts of insider trading.
Instead, the appellate court sided with Ongpin’s contention that only “findings of fact” of quasi-judicial agencies are binding upon the court as stated in Section 10, Rule 43 of the Rules of Court.
“This Court is therefore not bound by the legal conclusions of the former owing to the inherent duty of courts of law to determine legal issues and settle actual controversies,” the CA ruled.
The appellate court noted that the other arguments raised by SEC in its MR “are mere rehash” of those that have already been discussed and resolved in its Dec. 1, 2017 decision.
“This Court is therefore not convinced that a modification of our ruling is warranted,”
In its July 2016 decision, the SEC barred Ongpin, a former trade minister under the late dictator Ferdinand Marcos, from becoming part of the board of any Philippine Stock Exchange-listed firm.
The commission also ordered him to pay a fine of P174 million, or P1 million each for 174 counts of insider trading.
The SEC found Ongpin liable for insider trading when he accumulated then sold a big block of Philex shares to Manuel Pangilinan-led First Pacific, with the prior knowledge of an agreed upon price at which to sell the shares.
Ongpin acquired his first block of Philex Mining shares from Banco de Oro in 2007.
He then acquired additional shares held by John Gokongwei and Manuel Zamora.
In the morning of Dec. 2, 2009, Ongpin, through Golden Media Corporation, bought another block of almost 50 million shares at P19.25 each, from the open market.
That evening, Ongpin sold his 550 million shares for P21 apiece to Two Rivers Pacific Holdings Corp., a subsidiary of First Pacific.
As a result, First Pacific assumed control over Philex.
In reversing the SEC, the CA did not give merit to the Office of the Solicitor General’s contention that the price of P21.00 per share and the date of the intended block sale are material since the price of Philex shares went down from P19.00 on Dec. 2, 2009 to P17.75 or about 25.5 percent within two days after the sale in favor of First Pacific.
"While it was alleged that the drop in the price of Philex shares after the information was made public was seen as an ‘unusual’ occurrence" or a ‘red flag’, thereby suggesting that any reasonable investor would have considered the subject information material, the OSG, however, failed to specifically identify what is ‘unusual’ as opposed to a usual or regular fluctuation in stock market prices," the CA said.
"We reckon that the public disclosure of the December 2, 2009 sale in favor of First Pacific simply ended all aggressive speculation, and this inevitably lead to the drop in the market price of Philex shares. Yet, all these incidents cannot be taken as clear and direct indication that there was indeed insider trading," it added.