Brokers fined for failing to report 'suspicious' transactions

Posted at 10/22/12 2:44 PM

MANILA, Philippines - Capital Markets Integrity Corp., which monitors trading activities in the local stock exchange, slapped three brokers with stiff penalties for failing to report their clients' alleged suspicious transactions.

HDI Securities, Inc., Nieves Securities, Inc., and Tower Securities, Inc. were all fined with a P200,000 penalty for violating a CMIC rule, according to a Memo for Brokers 2012-012, published on the Philippine Stock Exchange web site.

Said rule violated required the trading participant (the broker) to inform the CMIC any suspicion of a client's transactions which possibly constitute unusual trading activities, trading related irregularities or other violations of Securities Laws.

On top of said fine, the three were also slapped with a P30,000 penalty for violating another CMIC rule, which requires the broker to engage clients in a face to face meeting, and to probe into their customers' financial situations, investment experiences and objectives.

Moreover, Nieves Securities was penalized with another P30,000 for its "failure to obtain a new account information for one of the parties to a joint account."

The three firms are just among the 42 brokers meted out with disciplinary actions by the CMIC. Most or 25 of the 42 brokers were given only a written reprimand for minor violations such as failure to update their accounting books.

CMIC, an independent unit of the PSE, is tasked to maintain market integrity through surveillance of trading activities.