Liabilities of controlling person.
SEC. 44. Liabilities of controlling person.—(a) Every person who, by or through stock ownership, agency, or otherwise, or in connection with an agreement understanding with one or more other persons by or through stock ownership, agency or otherwise, controls any person liable under this Act, shall also be liable jointly and severally with and to the same extent as such controlled persons to any person to whom such controlled person is liable, unless the controlling person proves that, despite the exercise of due diligence on his part, he has no knowledge of the existence of the facts by reason of which the liability of the controlled person is alleged to exist.
(b) It shall be unlawful for any person, directly or indirectly, to do any act or thing which would be unlawful such person to do under the provisions of this Act or any rule or regulation thereunder through or by means of any other person.
(c) It shall be unlawful for any director or officer of or any owner of any securities issued by, any issuer of any security registered in accordance with this Act, without just cause, to hinder, delay or obstruct the making or filing of any document, report, or information required to be filed under this Act or any rule or regulation thereunder. (29a)
Investigations, injunctions and prosecution of offenses.
SEC. 45. Investigations, injunctions and prosecution of offenses.— (a) The Commission may, in its discretion, make such investigations as it deems necessary to determine whether any person has violated or is about to violate any provision of this Act or any rule or regulation thereunder, and may require or permit any person to file with it a statement in writing, under oath or otherwise, as the Commission shall determine, as to all facts and circumstances concerning the matter to be investigated. The Commission is authorized, in its discretion, to publish information concerning any such violations, and to investigate any fact, condition, practice or matter which it may deem necessary or proper to aid in the enforcement of the provisions of this Act, in the prescribing: of rules and regulations thereunder, or in securing information to serve as a basis for recommending further legislation concerning the matters to which this Act relates: Provided, however, That no such investigation shall be conducted unless the person investigated is furnished with a copy of any complaint which may have been the cause of the initiation of the investigation or is notified in writing of the purpose of such investigation: Provided, further, That all criminal complaints for violations of this Act, and the implementing rules and regulations enforced or administered by the Commission shall be referred to the National Prosecution Service of the Ministry of Justice for preliminary investigation and prosecution before the proper court: and, Provided, finally, That the investigation, prosecution, and trial of such cases shall be given priority.
(b) For the purpose of any such investigation, or any other proceeding under this Act, the Commission or any officer designated by it is empowered to administer oaths and affirmations, subpoena witnesses, compel attendance, take evidence, require the production of any book, paper, correspondence, memorandum, or other record which the Commission deems relevant or material to the inquiry, and to perform such other acts necessary in the conduct of such investigation or proceedings.
(c) Any person who, without just cause, fails or refuses to comply with any order, decision or subpoena issued by the Commission, in the proper exercise of its authority and jurisdiction under subparagraph (b) or subparagraph (c) of this Section or Section 47 of this Act, if in the power of such person to do so, shall after due notice and hearing, be guilty of contempt of the Commission and shall be subject to discipline by the Commission as in the case of contempt of court, either by a fine in such reasonable amount as the Commission may determine, or when such failure or refusal is a clear and open defiance of the Commission’s order, decision or subpoena, by detention under an arrest order, as may be issued by the Commission, at the discretion of the Commission, until such order, decision or subpoena is complied with.
(d) The powers of the Commission under this Section shall be in addition to any other powers granted under existing laws. (31a)
Administrative sanctions.
SEC. 46. Administrative sanctions. — If, after proper notice and hearing, the Commission finds that there is a violation of this Act, its rules, or its orders or that any registrant has, in a registration statement and its supporting papers and other reports required by law or rules to be filed with the Commission, made any untrue statement of a material fact, or omitted to state any material fact required to be stated therein or necessary to make statements therein not misleading, or refused to permit any lawful examination into its affairs, it shall, in its discretion, impose any or all of the following sanctions:
Suspension, or revocation of its certificate of registration and permit to offer securities;
A fine of no less than two hundred (P200.00) pesos nor more than fifty thousand (P50,000.00) pesos plus not more than five hundred (P500.00) pesos for each day of continuing violation;
Disqualification from being- an officer, member of the board of directors or principal stockholder of an issuer whose securities are or are about to be registered pursuant to this Act; and
Other penalties within the power of the Commission under existing laws.
The imposition of the foregoing administrative sanctions shall be without prejudice to the filing of criminal charges against the individuals responsible for the violation.
The Commission shall have the power to issue writs of execution to enforce the provisions of this Section and to enforce payment of the fees and other dues collectible under this Act. (n)
Cease and desist order.
SEC. 47. Cease and desist order.—The Commission, after proper investigation or verification, motu proprio, or upon verified complaint by any aggrieved party, may issue a cease and desist order without the necessity of a prior hearing if in its judgment the act or practice, unless restrained may cause grave or irreparable injury or prejudice to the investing public or may amount to fraud or violation of the disclosure requirements of this Act and the rules and regulations of the Commission.
Such cease and desist order shall be confidential until after the sanctions mentioned in the next preceding Section shall have been imposed and have become final and executory.
Immediately upon the issuance of such order, the Commission shall, with due notice to the parties involved, schedule a hearing, on a date not later than fifteen days after service of notice, on whether to lift such order or to impose the administrative sanctions provided for in the next preceding Section. (n)
Special accounting rules.
SEC. 48. Special accounting rules. —The Commission shall have the authority, subject to the approval of the Minister of Finance to make, amend, and rescind such accounting rules and regulations as may be necessary to carry out the provisions of this Act, including rules and regulations governing registration statements and prospectuses for various classes of securities and issuers, and defining accounting, technical, and trade terms used in this Act. Among other things, the Commission shall have authority, for the purpose of this Act, to prescribe, with the approval of the Minister of Finance, the form or forms in which require information shall be set forth, the items or details to be shown in the balance sheet and earning statement, and the methods to be followed in the preparation of the accounts, appraisal or valuation of assets and liabilities, determination and depreciation and depletion, differentiation of recurring and nonrecurring income, differentiation of investment and operating income, and in the preparation, where the Commission deems it necessary or desirable, of consolidated balance sheets or income accounts of any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer. (n)
Revelation of information filed with the Commission.
SEC. 49. Revelation of information filed with the Commission. —(a) All information file with the Commission in compliance with the requirements of this Act shall be made available to any member of the general public, upon request, in the premises and during regular office hours of the Commission, except as set forth in this Section.
(b) Nothing in this Act shall construed to require, or to authorize the Commission to require, the revealing of trade secrets or processes in any application, report, or document filed with the Commission.
(c) Any person filing any such application, report or document may make written objection to the public disclosure of information contained therein, stating the grounds for such objection, and the Commission is authorized to hear objections in any such case as it deems advisable. The Commission may, in such cases, make available to the public the information contained in any such application, report, or document only when a disclosure of such information is required in the public interest or for the protection of investors; and copies of information so made available may be furnished to any person having a legitimate interest therein at such reasonable charge and under such reasonable limitations as the Commission may prescribe.
(d) It shall be unlawful for any member, officer, or employee of the Commission to disclose to any person other than a member, officer or employee of the Commission or to use for personal benefit, any information contained in any application, report, or document filed with the Commission which is not made, available to the public pursuant to subsection (c) of this Section. (34a)
, Effect of action of Commission and unlawful representations with respect thereto.
SEC. 50, Effect of action of Commission and unlawful representations with respect thereto.—No action or failure to act by the Commission in the administration of this Act shall be construed to mean that the Commission has in any way passed upon the merits of or given approval to any security or any transaction or transactions therein, nor shall such action or failure to act with regard to any statement or report filed with or examined by the Commission pursuant to this Act or the rules and regulations thereunder to be deemed a finding by the Commission that such statement or report is true and accurate on its face or that it is not false or misleading. It shall be unlawful to make, or cause to be made, to any prospective purchaser or seller of a security any representation that any such action or failure to act by the Commission is to be so construed or has such effect.
Nothing herein contained shall, however, be construed as an exemption from liability of any employee or officer of the Commission for any nonfeasance, misfeasance or malfeasance in the discharge of his official duties. (36a)
Effect on existing law.
SEC. 51. Effect on existing law.—The rights and remedies provided by this Act shall be in addition to any and all other rights and remedies that may now exist. However, except as provided in Section twelve hereof, no person permitted to maintain a suit for damages under the provisions of this Act shall recover, through satisfaction of judgment in one or more actions, a total amount in excess of his actual damages on account of the act complained of: Provided, That the court may award exemplary damages in cases of bad faith, fraud, malevolence or wantonness in the violation of this Act or the rules and regulations promulgated thereunder. (37a)
Class actions; consolidation of actions.
SEC. 52. Class actions; consolidation of actions. —The Commission may promulgate rules and regulations as may be necessary or appropriate in the public interest or for the protection of investors which will govern (1) class actions involving any violation of this Act or the rules promulgated by the Commission, (2) the consolidation of actions brought pursuant to Act or rules promulgated by the Commission, and (3) the compensation of counsel in class actions, (n)
Validity of contracts.
SEC. 53. Validity of contracts.—(a) Any condition, stipulation, provision binding any person to waive compliance with any provision of this Act or of any rule or regulation thereunder, or of any rule of an exchange required thereby, as well as the waiver itself, shall be void.
(b) Every contract made in violation of any provision of this Act or of any rule or regulation thereunder, and every contract, including any contract for listing a security on an exchange heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of, any provision of this Act, or any rule or regulation thereunder, shall be void:
As regards the rights of any person who, in violation of any such provision, rule or regulation, shall have made or engaged in the performance any such contract, and
As regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which, the making or performance of such contract was in violation of any such provision, rule or regulation.
(c) Nothing in this Act shall be construed—
To affect the validity of any loan or extension of credit made or of any lien created prior or subsequent to the effectivity of this Act, unless at the time of the making of such loan or extension of credit or the creating of such lien, the person making such loan or extension of credit or acquiring such lien shall have actual knowledge of the facts by reason of which the making of such loan or extension of credit or the acquisition of such lien is a violation of the provisions of this Act or any rules or regulations thereunder, or
To afford a defense to the collection of any debt, obligation or the enforcement of any lien by any person who shall have acquired such debt, obligation or lien in good faith, for value and without actual knowledge of the violation of any provision of this Act or any rule or regulation thereunder affecting the legality of such debt, obligation or lien. (38a)
Additional fees of stock exchanges.
SEC. 54. Additional fees of stock exchanges.—In addition to the registration fee prescribed in Section 22 of this Act, every securities exchange shall pay to the Commission, on or before March fifteen of each calendar year, a fee in an amount not more than one one-hundredth of one per centum of the aggregate amount of the sales of securities transacted on such securities exchange during the preceding calendar year, for the privilege of doing business as a securities exchange, during the preceding calendar year any part thereof. (39a)
Effectivity of rules and regulations.
SEC. 55. Effectivity of rules and regulations. —The rules and regulations promulgated by the Commission shall be published in two newspapers of general circulation in the Philippines or in the Official Gazette, at the option of the Commission, and unless otherwise prescribed by the Commission, the same shall be effective fifteen (15) days after the date of last publication. (n)
Penalties.
SEC. 56. Penalties. —Any person who violates any of the provisions of this Act, or the rules and regulations promulgated by the Commission under the authority thereof, or any person who, in a registration statement filed under this Act, makes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, shall, upon conviction, suffer a fine of not less than five thousand (P5,000.00) pesos nor more than five hundred thousand (P500.000.00) pesos or imprisonment of not less than seven (7) years nor more than twenty one (21) years, or both in the discretion of the court. If the offender corporation, partnership or association or other jundicial entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for the violation, and if such officer is an alien, he shall, in addition to the penalties prescribed, be deported without further proceedings after service of sentence. (40a)
Transitory provisions.
SEC. 57. Transitory provisions. —The Commission, reorganized pursuant to Presidential Decrees Numbered 902-A, 1653. 1758 and 1799, shall continue to exist and exercise its powers, functions and duties until otherwise provided by law.
All securities which at the time of the effectivity of this Act have been registered with the Commission and have been permitted to be sold under the provisions Commonwealth Act No. 83, as amended, shall be considered as registered and permitted to be sold under this Revised Securities Act: Provided, however, That any further requirements of this Act shall be complied with within such reasonable time as the Commission may determine but not exceeding one year from the approval of this Act.
Violations committed prior to the effectivity of this Act shall be punished in accordance with the provisions of the laws then in force. (n)
Separability provisions.
SEC. 58. Separability provisions. —If any provision of this Act shall be held invalid, the remainder of the Act not otherwise affected shall remain in full force and effect. (41a)
Repealing clause.
SEC. 59. Repealing clause.—Commonwealth Act No. Eighty-three, as amended, is hereby repealed in its entirety. All other laws, orders, rules and regulations, or parts thereof, inconsistent with any provision of this Act are hereby repealed or modified accordingly. (42a)
Effective date.
SEC. 60. Effective date.—This Act shall take effect immediately upon its approval. (44a)
Approved, February 23, 1982.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
