CA affirms indictment of Calata shareholders
Credit to Author: EIREENE JAIREE GOMEZ| Date: Thu, 03 Oct 2019 16:16:40 +0000
THE Court of Appeals (CA) affirmed the indictment of eight shareholders of Calata Corp. over trading activities that artificially inflated the price of the company’s shares and consequently induced the public to buy them.
In a decision released on September 10, the Special Sixth Division of the appellate court granted the petition for certiorari by the Securities and Exchange Commission (SEC) to nullify the resolutions of the Department of Justice (DoJ) dismissing the complaint and directing the withdrawal of the criminal case filed against the shareholders.
SEC filed the complaint with the DoJ task force on securities and business scam on Nov. 26, 2012.
The respondents were found to have engaged in “high-frequency, high-volume buying and selling transactions and several EQ trades or the transfer of shares from one broker to another to artificially raise the price of Calata’s shares and make profits in the process, a violation of Section 24 (b) (i) and (iii) of Republic Act No. 8799 or the “Securities Regulation Code (SRC).”
SEC said the stakeholders used manipulative devices, such as “painting the tape” and “hype and dump” immediately after Calata went public on May 23, 2012.
Calata’s share price increased by almost 226 percent from P7.35 to P23.95 apiece by June 4, 2012, noting that the downtrend to P12.40 started on June 8, 2012, it added.
The eight stakeholders accounted for 32.95 percent of the shares bought and 38.47 percent of the shares sold during the said trading period. They also traded their respective shares by opening accounts with several brokers.
On March 18, 2018, the SEC filed the petition for certiorari to nullify the DoJ resolution while its motion for reconsideration of the dismissal of the criminal case remained pending at the Regional Trial Court (RTC) in Makati City.
SEC said it had established probable cause that Section 24 (b) (i) and iii) of the SRC had been violated through conspiracy and that the indicted shareholders are guilty of it.
The CA sided with the SEC nullifying the DoJ resolution and reinstating the task force’s resolution of finding probable cause for the indictment.
“At bench, there was no dispute that Calata shares’ valuation and price had increased exponentially during the subject period or that the increase was brought about by the buy and sell transactions done by respondents, who most of the time used the same checkbook for the transactions,” the CA noted.
The respondents gave no adequate reasons for their actuations except bare denials.