The Securities and Exchange Commission (SEC) ordered the Capital Markets Integrity Corporation Corp. (CMIC) to take over the operations of Equitiworld Securities Inc. (EQWorld), a brokerage firm led by businessman Antonio Lopa, to protect its clients.
CMIC is a self-regulatory organization tasked to maintain the integrity of the market and ensure trading participants comply with all pertinent rules, regulations and code of conduct of the local bourse and related legislative and regulatory requirements.
The SEC said it issued the takeover order on Nov. 12, 2024 after CMIC’s special audit showed that EQWorld was no longer capable to readily meet the demands of its customers for the delivery of securities and payment of sales proceeds.
It said the audit showed “material discrepancies” in the reported stock and cash positions of EQWorld, among others.
“This takeover order shall be without prejudice to institution of appropriate administrative, civil or criminal actions against [EQWORLD] for violations of the provisions SRC and/or the SRC-IRR which this Commission, the proper SRO, or the Exchange may, now or hereafter find,” the SEC said.
The SEC said it directed CMIC to promptly take possession and control of all of the books and records as well as trade-related assets of EQWorld.
It also asked CMIC to suspend EQWorld’s membership in the Philippine Stock Exchange and immediately arrange for another member of the exchange to take over the outstanding contracts relating to securities.
The SEC said CMIC found a material discrepancy in the shares appearing in the EQWorld’s stock position report and the business partner portfolio report totaling 154,910,321 shares worth P46,139,569.00.
“The foregoing affirms the variances and/or discrepancies found by the CMIC, and clearly reveals that EQWORLD doesn’t have these shares [or the shares in its possession are not sufficient to satisfy the demands of its customers] and/or it does not have sufficient cash to pay the proceeds of the sale of shares,” the SEC said.
It said CMIC also received complaints and claims due to EQWorld’s inability to comply with their demands for the delivery of securities, including the transfer of their securities to other trading participants or payment of sales proceeds.
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