The Securities and Exchange Commission again warned investors against the “pre-selling” of stocks of hospitals that are currently under construction.
The SEC said in an advisory posted on its website it received information that several individuals or groups of persons had been offering or “pre-selling” securities to the public in the form of shares stock in hospitals currently under construction.
The SEC said these shares of stock to attract investors allegedly grant the purchasers certain hospital benefits, such as waived or discounted operating room fees, free or discounted private room, ward and intensive care unit accommodations, discounts on use of ICU equipment, medicines, medical supplies and other merchandise, and discounts on hospital services as well as out-patient and in-patient case rates.
“The public is hereby informed that these shares of stock being offered are within the definition of ‘securities’ under Section 3.1 of the Securities Regulation Code and are required… to be registered with the SEC under a simplified format pursuant… before being offered or sold to the general public,”the SEC said.
“Thus, a pending application for registration without approval of the commission does not give hospitals the imprimatur to issue such shares of stock,” it added.
Only Diliman Doctors Hospital and St. Lukes Medical Center Global City to date have registered their shares of stock with the SEC and are authorized to issue such shares to the public.
The SEC said individuals or group of persons who engaged in the offering or “pre- selling” of securities to the public without the registration statement duly filed with and approved by the SEC should be held criminally liable under the SRC.
The SEC in 2013 issued a cease-and-desist order against Pacific Global Medical Center Inc. and Diliman Doctors Hospital Inc. and penalized South East Asia Medical Inc. and United Doctors Service Corp. for offering unregistered securities to the public.