Liabilities of controlling persons.
SEC. 29. Liabilities of controlling persons.—
Every person who, directly or indirectly, controls any person liable under any provision of this Act or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.
It shall be unlawful for any person, directly or indirectly, to do any act or thing which it would be unlawful for such person to do under the provisions of this Act or any rule or regulation thereunder through or by means of any other person.
It shall be unlawful for any director or officer of, or any owner of any of the 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.
Remedies.
SEC. 30. Remedies.—
Every sale made in violation of any of the provisions of this Act or wherein the purchaser shall have relied upon any statement which was at the time and in the light of the circumstances under which it was made false and misleading with respect to any material fact contained in any application, report, or document filed pursuant to this Act or any rule or regulation thereunder, shall be voidable at the election of the purchaser; and the person making such sale and every director, officer or agent of or for such seller, if such director, officer or agent shall have personally participated or aided in any way in making such sale, shall be jointly and severally liable to such purchaser in an action in any court of competent jurisdiction upon tender of the securities sold or of the contract made for the full amount paid by such purchaser, with interest, together with all taxable court costs and reasonable attorney's fees: Provided, That no action shall be brought for the recovery of the purchase price after two years from the date of such sale: And provided, further, That no purchaser otherwise entitled shall claim or have the benefit of this section who shall have refused or failed within thirty days from the date thereof to accept an offer in writing of the seller to take back the security in question and to refund the full amount paid by such purchaser, together with interest on such amount for the period from the date of payment by such purchaser down to the date of repayment, such interest to be computed:
In case such securities consist of interest-bearing obligations, at the same rate as provided in such obligations; and
In case such securities consist of other than interest-bearing obligations, at the rate of six per centum per annum; less, in every case, the amount of any income from said securities that may have been received by such purchaser.
Any person having a right of action against a dealer, broker or salesman under this section shall have a right of action under the bond provided in section fourteen.
Investigations, injunctions and prosecution offense.
SEC. 31. Investigations, injunctions and prosecution offense.—
The Commission may, in its discretion, make prosecution of 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 the 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.
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, and require the production of any book, paper, correspondence, memorandum, or other record which the Commission deems relevant or material to the inquiry. Any person who shall, without just cause, fail or refuse to attend and testify or to answer any lawful inquiry or to produce books, papers, correspondence, memoranda, and other records, if in his power so to do, in obedience to the subpoena of the Commission, shall be guilty of an offense and, upon conviction, shall be subject to discipline as in case of contempt of court and, upon application of the Commission, shall be dealt with by the Court of First Instance where such person resides, in the manner provided by law.
No person shall be excused from attending and testifying or from producing books, papers, contracts, agreements and other records and documents before the Commission or in obedience to the subpoena of the Commission or any officer designated by it, or in any cause or proceeding instituted by the Commission, on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privilege against self- incrimination, to testify or produce evidence, documentary or otherwise, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.
Whenever it shall appear to the Commission that any person is engaged or about to engage in any act or practice which constitutes or will constitute a violation of the provisions of this Act, or of any rule or regulation thereunder, it may in its discretion bring an action in the Court of First Instance of Manila to enjoin such acts or practices, and upon a proper showing, a permanent or temporary injunction or restraining order shall be granted without bond. The Commission may transmit such evidence as may be available concerning such acts or practices to the Secretary of Justice, who may, in his discretion, order or institute the necessary proceedings, criminal or civil, under this Act.
Upon application of the Commission, the Court of First Instance of Manila shall also have jurisdiction to issue mandatory injunctions commanding any person to comply with the provisions of this Act or any order of the Commission made in pursuance thereof.
Hearing by Commission.
SEC. 32. Hearing by Commission.—Hearings may lie and may be held before the Commission, or any officer or officers of the Commission designated by it, and appropriate records thereof shall be kept.
Rules and regulations.
SEC. 33. Rules and regulations.—The Commission shall have power to make such rules and regulations as may be necessary for the execution of the functions vested in it by this Act.
Revelation of information filed with the Commission.
SEC. 34. Revelation of information filed with the Commission.—
Nothing in this Act shall be 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.
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,
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 (b) of this section.
Court review of orders.
SEC. 35. Court review of orders.—
Any person aggrieved by an order issued by the Commission in a proceeding under this Act to which such person is a party or who may be affected thereby may obtain a review of such order in the Supreme Court of the Philippines by filing in such court, within sixty days after the entry of such order, a written petition praying that the order of the Commission be modified or set aside in whole or in part. A copy of such petition shall be forthwith served upon the Commission, and thereupon the Commission shall certify and file in the court a transcript of the record upon which the order complained of was entered. Upon the filing of such transcript, such court shall have exclusive jurisdiction to affirm, modify, and enforce or set aside such order, in whole or in part. No objection to the order of the Commission shall be considered unless such objection shall have been urged before the Commission, provided that opportunity therefor has been afforded. The finding of the Commission as to the facts shall be conclusive. If either party shall apply to the court for leave to adduce additional evidence and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for failure to adduce such evidence in the hearing before the Commission, the court may order such additional evidence to be taken before the Commission and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The Commission may modify its findings as to the facts, by reason of the additional evidence so taken, and it shall file such modified or new findings, which shall be conclusive, and its recommendation, if any, for the modification or setting aside of the original order.
The judgment and decree of the court, affirming, modifying, and enforcing or setting aside, in whole or in part, any such order of the Commission, shall be final, subject to review by the Supreme Court of the United States in cases where and upon the grounds by which a petition for a writ of certiorari to the Supreme Court of the Philippines may be presented in the Supreme Court of the United States.
The commencement of proceedings under subsection (a) hereof shall not operate as a stay of the Commission's order unless specifically ordered by the Court.
Effect of action of Commission and unlawful representations with respect thereto.
SEC. 36. 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 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.
Effect on existing law.
SEC. 37. 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, but 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.
Validity of contracts.
SEC. 38. Validity of contracts.—
Any condition, stipulation, or 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, shall be void.
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 of 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 effectiveness 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 rule or regulation 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.
Additional fee of stock exchanges.
SEC. 39. Additional fee of stock exchanges.—In addition to the registration fee prescribed in section seventeen of this Act, every securities exchange shall pay to the Treasurer of the Philippines, on or before March fifteen of each calendar year, a fee in an amount equal to one five-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 or any part thereof.
Penalties.
SEC. 40. Penalties.—Any person who willfully violates any provision of this Act, or any lawful rule or regulation thereunder, the violation of which is made unlawful or the observance of which is required under the terms of this Act, or any person who willfully and knowingly makes, or causes to be made, any statement in any application, report, or document required to be filed under this Act, or any lawful rule or regulation thereunder, which statement is false or misleading with respect to any material fact, shall, upon conviction, be sentenced to suffer imprisonment for a period not exceeding two years, or a fine not exceeding twenty thousand pesos, or both, in the discretion of the court, except that when such person is an exchange, the penalty shall be a fine which shall not exceed one hundred thousand pesos.
Separability of provisions.
SEC. 41. Separability of provisions.—If any provision of this Act shall be held invalid, the remainder of the Act shall not be affected thereby.
Repealing clause.
SEC. 42. Repealing clause.—All Acts or parts of Acts inconsistent with this Act are hereby repealed.
Appropriation.
SEC. 43. Appropriation.—The sum of fifty thousand pesos, together with all the collections under the provisions of this Act, or so much thereof as may be necessary, are hereby appropriated out of any funds in the Philippine Treasury not otherwise appropriated, to be disbursed upon order of the Department Head, for the payment of salaries and travel expenses of the officers and personnel of the Commission, for the purchase of equipment and supplies, and for such other incidental expenses as may necessarily be incurred to carry into effect the provisions of this Act.
Effective date.
SEC. 44. Effective date.—Chapters I, II, and III of this Act, and so much of Chapter VI thereof as are necessary to carry into effect the provisions of Chapter III, shall take effect on the date of the approval of this Act; all the other Chapters and provisions shall take effect on January first, nineteen hundred and thirty-seven.
Approved, October 26, 1936.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
