Doris Dumlao-Abadilla, 22 May 2021
MANILA, Philippines – The Pasig Regional Trial Court has convicted a local stock broker of illegal stock trading in relation to the BW Resources stock price manipulation scandal 22 years ago.
Johnny Yap, then president, sales manager and director of Solar Securities Inc., was sentenced to 14 years in jail and ordered to pay a fine of P1 million for illegal trades that led to a 1,462-percent surge in the stock price of BW, a loss-making gaming stock.kIn a decision dated May 7, Pasig RTC Branch 67 found guilty beyond reasonable doubt of violation of Section 26(a)(I)(1) of the Revised Securities Act, now Section 24.1(a)(i) of the Securities Regulation Code (SRC).
The Securities and Exchange Commission filed a criminal complaint against Yap after Solar Securities was found to have committed 142 counts of buy and sell orders for BW that constituted “wash sale” transactions during the months of June and October 1999.
Wash sales refer to transactions wherein the buyer and seller of the stock share a beneficial owner.
A Special Operations Group (SOG) formed by the SEC in August 2000 to investigate the matter found that Solar Securities’ transactions were wash sales not only because the brokerage was both the buyer and the seller in all the 71 buy order and 71 sell order transactions, but also because the offers and bids had been made at very close intervals.