Investigation, Offenses and Penalties

Chairman: Errol John Ramos

Secretary: Rose Ann Bonaobra
Members: Natalia Valerie Ouano
Allana Nacino
Carl Valera

Chairman: May the SEC impose the fines provided under Secs. 159-170?

Allana: Yes, Mr. Chairman. Under Section 5 par. (5) of the Securities Regulations Code, Republic
Act 8799, the commission shall impose sanctions for the violation of laws and the rules,
regulations and orders issued pursuant thereto. By imposing the sanctions and fines under
Secs. 159-170, the SEC only acted within the powers vested to it by its charter.

Carl: I agree, Mr. Chairman. Provided under Sec. 179 par. (c), the Commission shall have the
power to impose sanctions for the violations of this Code, its implementing rules and orders of
the Commission. Provided further that by imposing penalties and additional monitoring and
supervision requirements, the Commission shall take into consideration the size, nature of the
business, and capacity of the corporation.

Natalia: I move that we agree to consolidate and adapt the answers of Allana and Carl.

Rose Ann: I second the motion.

Chairman: It has been moved and seconded that the SEC may impose the fines provided under
Secs. 159-170.

Chairman: May a preliminary investigation or criminal violation for the violation for the Code be
conducted without a prior investigation and finding of the violation by the SEC?

Natalia: No, Mr. Chairman. There must be a prior investigation and findings of the violation by
the SEC following the principle of exhaustion of administrative remedies as it is the Commission
who have the specialized, personnel, experience, and expertise to sort and decide on matters in
relation to such violations of the Revised Corporation Code.

Carl: Mr. Chairman, I disagree with the remarks of Ms. Natalia. According to Sec. 154, “may”
was used to suggest that it is only directive for the SEC to investigate any criminal liability of a
corporation. Ultimately, under Sec. 156 par. (3) provides that the Commission may proceed
administratively against such person in accordance with Section 158 of this Code, and/or
transmit evidence to the Department of Justice for preliminary investigation or criminal
prosecution and/or initiate criminal prosecution for any violation of this Code, rule, or
regulation.
Allana: Mr. Chairman, I would like to qualify. As provided by jurisprudence, while the doctrine
of administrative remedies is a cornerstone of our juridical system, it is not an iron clad rule and
has several exceptions, most importantly: (a) where the challenged administrative act is
patently illegal, amounting to lack of jurisdiction; and (b) where the question involved is purely
legal and will ultimately have to be decided by the courts of justice.

Chairman:

The meeting was adjourned at 4:00 pm

Sgd.

Rose Ann Bonaobra

Secretary

Under Section 5.2 of the Securities Regulation Code, the Commission’s jurisdiction over all cases
enumerated under Section 5 of PD 902-A has been transferred to the Courts of general jurisdiction or the
appropriate Regional Trial Court. The Commission shall retain jurisdiction over pending cases involving
intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from
the enactment of the Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.