In the Matter of Pacific Global Medical Center, Inc.

January 16, 2014 SEC EN BANC CASE NO. 01-13-280 IN THE MATTER OF PACIFIC GLOBAL MEDICAL CENTER, INC. ENFORCEMENT AND PROSECUTION DEPARTMENT (now the ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT) , petitioners . ORDER Pending before the Commission is a Memorandum on Appeal dated 04 January 2013 filed on 07 January 2013 by Pacific Global Medical Center, Inc. (hereinafter "Pacific Global") questioning the Order dated 19 December 2012 issued by the Enforcement and Investor Protection Department (formerly, Enforcement and Prosecution Department) (hereinafter, EIPD) in relation to SEC-EPD Case No. 12-3000 against Pacific Global wherein the latter was penalized for violation of Sections 8 and 12 of the Securities Regulation Code (SRC). The facts as culled from the records are as follows: On 15 November 2011, an advertisement was published in the Philippine Daily Inquirer announcing an investment opportunity in the Pacific Global Medical Center. Upon verification with the Corporation Finance Department (now the Corporate Governance & Finance Department) (hereinafter, CGFD), the EIPD discovered that Pacific Global is not a registered issuer of securities under Sections 8 and 12 of the SRC. Hence, the EIPD conducted an investigation on the activities of Pacific Global. During the ocular inspection, the EIPD found a large banner with the words "INVEST NOW" written across as well as the telephone number to contact for more details. TcSCEa Further, through an interview with Ms. Joyce T. Ablang, the person who manned the Pacific Global Medical Center, Inc. office, the EIPD unearthed in-depth information on the investment scheme offered by Pacific Global to the public wherein a minimum investment in the amount of Three Hundred Forty Thousand (Php340,000.00) entitles the investor to one (1) block of common shares or forty (40) shares of stock and payments of the dividends that shall accrue to the said shares of stock. In this connection, the EIPD investigation team was also able to secure brochures containing more information about Pacific Global as well as the offered investment. On 12 September 2012, the EIPD issued a Show Cause Order against Pacific Global informing the corporation of EIPD's findings that the latter is in violation of Sections 8 and 12 of the SRC. On 04 October 2012, Pacific Global filed a Manifestation and Formal Settlement Offer praying that it be allowed to settle the case against it through the payment of Ten Thousand Pesos (Php10,000.00) pursuant to Section 55 of the SRC. On 11 October 2012, upon Motion 1 of the EIPD, the Commission issued a Cease and Desist Order (CDO) against Pacific Global enjoining the latter from continuing to deal in securities without the requisite registration issued by the Commission. The case was docketed as SEC CDO Case No. 09-12-007. On 19 December 2012, after several conferences with representatives of Pacific Global as well as the submission by Pacific Global of certain documents required by the EIPD, the EIPD issued the assailed Order denying Pacific Global's settlement offer in the amount of Ten Thousand Pesos (Php10,000.00) and ordering the latter to pay an administrative fine in the amount of Four Hundred Thousand Pesos (Php400,000.00) based on the finding that the common shares by Pacific Global are securities within the purview of the SRC, which were unregistered yet offered to the public, in violation of the law. Hence, the filing of the instant appeal on 07 January 2013. CcTHaD On 28 May 2013, Pacific Global filed with the Commission a Revised Settlement Offer in the amount of Two Hundred Thousand Pesos (Php200,000.00) on the strength that it is entitled to leniency and consideration of the Commission since 1) the offered settlement is more than the minimum acceptable offer under SEC Circular No. 4, Series of 2001; 2) the offer was timely and seasonably made; 3) the acceptance of the offer will lead to a successful conclusion of the case without much toll on the Commission's time and resources; 4) it is in the public interest considering that Pacific Global is in the business of providing health-related services; and 5) the nature of the offence does not appear to be of such gravity to merit a rejection of the settlement offer considering the facts and circumstances. The Prayer of the Revised Settlement Offer filed under docket nos. SEC EPD Case No. 12-3000, (SEC CDO Case No. 09-12-007 and SEC En Banc Case No. 01-13-280), states as follows: "WHEREFORE, in the interest of substantial justice and equity, it is respectfully prayed of this Honorable Commission that its Revised Settlement Offer in the amount of TWO HUNDRED THOUSAND (P200,000.00) PESOS, Philippine Currency, evidenced by Metrobank (Valencia Hills Branch) Cashier's Check No. 3430013674 , herewith enclosed, payable to the Securities and Exchange Commission, be approved, in full and final settlement of the above case, and that upon payment thereof and the submission of the required Sworn Undertaking, the appeal in SEC CDO Case No. 09-12-007 be considered withdrawn and this case/cases considered closed and terminated." Further, Pacific Global filed a Manifestation on 13 June 2013 submitting, in relation to its proffered settlement, a Sworn Undertaking to cease from offering to the public unregistered securities and/or apply for the required registration statement in the event that it will decide to offer securities to the public. On 18 October 2013, the EIPD filed a Manifestation stating that the Commission has resolved to accept the above-mentioned Revised Settlement Offer of 28 May 2013 in SEC Res. No. 529, s. of 2013 "without prejudice to any other violations which the Commission may thereafter discover, that has been committed by Pacific Global in connection with its offering of unregistered securities, such as, but not limited to, the discovery of actual sale of said unregistered securities." Payment of the Two Hundred Thousand (Php200,000.00) settlement offer was made by Pacific Global on 26 September 2013 evidenced by O.R. No. 0966512 issued by the Commission. cHTCaI A Settlement Order dated 14 October 2013 was issued by the EIPD and was posted in the Commission's website on 30 October 2013 with the following dispositive portion: WHEREFORE, premises considered, the payment tendered by PACIFIC GLOBAL MEDICAL CENTER, INC. as settlement of the instant case is hereby accepted without prejudice to any other violations which the Commission may thereafter discover, that has been committed by PACIFIC GLOBAL MEDICAL CENTER, INC. in connection with its offering of unregistered securities, such as, but not limited to, the discovery of actual sale of said unregistered securities. Otherwise, the Revised Settlement Offer shall be automatically revoked and PACIFIC GLOBAL MEDICAL CENTER, INC. shall be liable to the Commission, aside from the appropriate penalties for such violation, in the amount of Four Hundred Thousand Pesos (P400,000.00). WHEREFORE, the Commission having resolved to accept the Revised Settlement Offer of Pacific Global filed under SEC EPD Case No. 12-3000 in relation to SEC CDO Case No. 09-12-007 and the instant appeal, and the said payment having been made by the latter, the instant appeal is, hereby, considered withdrawn and this case CLOSED and TERMINATED. SO ORDERED. Mandaluyong City, January 16, 2014. (SGD.) TERESITA J. HERBOSA Chairperson (SGD.) MA. JUANITA E. CUETO Commissioner (SGD.) ELADIO M. JALA Commissioner (SGD.) MANUEL HUBERTO B. GAITE Commissioner (SGD.) ANTONIETA F. IBE Commissioner Footnotes 1. Motion for Issuance of Cease and Desist Order dated 12 September 2012.