THE Securities and Exchange Commission (SEC) has created a special panel that will hear the alleged P2.6-billion unauthorized trading at brokerage firm DW Capital, Inc. (DWCI).

In a press statement on Monday, the country’s corporate regulator said the special hearing panel will be tasked to continue the investigation on DWCI which started last Aug. 29.

DWCI is facing allegations that it engaged in the unauthorized trading of securities for five accounts totaling P2,599,324,718 as of July 18, 2017. The accounts referred to in the complaint are owned by the Gaisano family, a member of whom is married to former DWCI President Derwin Ngo Wong. 

“The Commission En Banc decided to form the Special Hearing Panel considering the extent of the transactions involved and allegations of fraud committed by trading participant. There are also claims and counterclaims by DWCI and its clients the Gaisanos,” according to the statement. 

The panel will be composed of lawyers from the SEC’s Enforcement and Investor Protection Department, Office of the General Counsel, and Markets & Securities Regulation Department. 

The SEC had earlier issued DWCI a subpoena directing the firm to submit documents and records needed to launch the investigation. Those documents include the customer master list, stock position report detailed per customer, per stock, per location; portfolio reports; transaction reports; account ledgers; statement of accounts; confirmation invoices; and customer account information forms.

The commission noted that the firm has already complied with all the documents specified in the subpoena, with DWCI manifesting that all the trades they conducted for the Gaisano family were authorized.

The SEC is acting on the case following a petition from stock exchange watchdog Capital Markets Integrity Corp. asking it to take over the operations of DWCI.

The commission is allowed to step in the operations of a failed trading participant according to the Securities Regulation Code, in order to protect the interests of the investing public. — Arra B. Francia

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