Jesus Sugui, et al. vs. Solidlink, Incorporated

[SEC-SICD * CASE NO. 09-95-5151. March 14, 1997.] JESUS SUGUI, LERRY HECHANOVA, and RAYMUND BATAC , plaintiffs , vs . SOLIDLINK, INCORPORATED , defendant . D E C I S I O N This is a case lodged by the above-mentioned complainants, Jesus Sugui, Lerry Hechanova, and Raymund Batac against Solidlink, Incorporated for the recovery of their investments plus interest allegedly lost through the fraudulent operations of the defendant. The complainants alleged that Solidlink, Inc. through their staff, Antonio Figueroa, Marijo Viray, Wilbur Dauz, Pearl Palaje and Maida Bumatay, and with the use of false pretenses that they were duly licensed by the Securities and Exchange Commission to trade, induced the complainants to invest the following sums on the dates as indicated: Jesus Sugui April 29, 1994 P130,000.00 Raymund Batac April 13, 1994 P100,000.00 Lerry Hechanova January 20, 1994 P100,000.00 March 4, 1994 1,000.00 March 9, 1994 30,000.00 May 24, 1994 94,000.00 July 1, 1994 36,947.00 July 22, 1994 3,053.00 Complainants further alleged that the defendant used high-pressure sales tactics and false assurances of "cannot lose deals" and fixed monthly or weekly gains from investments, only to result in pretended loses to a point that the total investment of the complainants were not only totally depleted, but even appeared to have a negative balance. The defendant on the other hand stated in their answer that the complainants voluntarily opened their respective accounts and were never presented a "sure win" business endeavor assuring them of fixed gains. The answer further asserted that pursuant to the Customer's Agreement and Guidelines for Spot/Futures Currency Trading, the accounts of the complainants were traded in accordance with the instructions of the complainants themselves; and that loses incurred by the complainants in the course of trading were due to the price fluctuations in the world currency market which is beyond the control of the defendant. In the course of the trial, the complainants through the witnesses they have presented corroborated their allegations. Witnesses presented included former employees of the defendant, namely Maida Bumatay and Alice del Rosario testified that the modus operandi of the defendant, Solidlink, Inc. was to make it appear that the sums infused by their clients were actually being invested, but in truth and in fact they were not; as these were converted and misappropriated through manipulation of accounts for the benefit of the defendant at their clients' expense. These witnesses testified based on their personal knowledge on how they go to know of the unusual operations of the defendant corporation's management. 1 The complainants also established that the defendant was using unlicensed members of its staff to act as traders; 2 and that these people, referred to as "financial consultants" are engaged in trading activities where they are the one making decisions on what to do with the clients' accounts. 3 Further proof of the defendant's unusual activities is shown by the fact that complainant Raymund Batac discovered that his signatures were forged in certain "buy" and "sell" instructions used by the defendant corporation. 4 The above arguments and allegations of fact by the complainants were not controverted by the defendant. There were four (4) hearings scheduled for the purpose of receiving evidence on the defendant's behalf; but in all the four occasions, the defendant failed to present their case without any concrete explanation for such failure. In view of the said fact, the complainants moved that the defendant be declared as having waived its right to present evidence on its behalf. The same was granted in an Order issued by this Commission dated 6 December 1996. The defendant did not seek to have the said Order reconsidered. It becoming final, this case was submitted for resolution. The undisputed evidences presented by the complainants proved the fraudulent schemes of the defendant corporation in siphoning out funds from its investors. Considering the intricacies involved in currency futures trading, the complainants could have easily been led to believe that the representations made by the employees of the defendant corporation were all true. It appears that all these representations were a part of a grand scheme of defrauding the defendant's investors. WHEREFORE, judgment is hereby rendered against the defendant, ordering the same to pay the complainants the sum of P495,000.00 in actual damages, plus interest computed from July 27, 1995, when complainants demanded for the return of their investments; and attorney's fees of P100,000.00. Should the defendant be incapable of paying the above amounts, and/or refuse to do so, let the execution of the judgment be had against the defendant's bond, if there be any, and against the Compensation Fund deposited with the Manila International Futures Exchange, Inc. LexLib SO ORDERED. C.A. GERARD M. LUKBAN Hearing Officer Footnotes 1. TSN, July 19, 1996, pp. 35-36, 39-40. 2. Ibid. , pp. 19-22; 28-29; 34. 3. Exhibit "A". 4. Exhibit "C", Annexes "K", "K-1"; TSN, August 7, 1996.