The Securities Regulation Code of 2000 has provisions on the powers and functions of the SEC to issue cease and desist orders (CDO) to prevent fraud or injury to the investing public (Section 5 (i) of the SRC) and to punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions of and penalties prescribed by the Rules of Court (Section 5 (j) of the SRC).

The 2006 Rules of Procedure of the Securities and Exchange Commission (SEC or Commission) discusses the manner and procedure in the issuance of the said CDO. The Rules relates specifically to the procedures in the enforcement of the Corporation Code of the Philippines (B.P. Blng 68), The Securities Regulation Code of 2000 (R.A. 8799), Presidential Decree 902-A and other related laws being implemented by the SEC.

Under the said Rules, a verified complaint may be filed by the aggrieved party with the Commission, through the Compliance and Enforcement Department (CED), for the issuance of a CDO in accordance with Section 64 of the Securities Regulation Code of 2000 (SRC).

In issuing the CDO, the Commission, through the Office of the General Counsel (OGC) and after a proper investigation by the CED, motu proprio, or upon verified complaint, may issue a CDO even without prior hearing if it can be found that the act or practice, unless restrained by a competent court, will operate as a fraud on investing public or is otherwise likely to cause grave or irreparable injury or prejudice to investors like the selling of unregistered securities. The Commission En Banc may also issue an order for the grant of a CDO on other cases in accordance with its powers under existing laws. An example of this is when there is evident fraud in the procurement of registration of the articles of incorporation and bylaws of a corporation. The CDO is also available in case of anonymous complaints or based on information that has come to the attention of the Commission,  which requires immediate action to protect the general public. (Rule X, The 2006 Rules of Procedure of the SEC)

The Commission through its officer (Hearing panel or authorized officer) may also summarily pass judgment on acts of direct contempt committed in the presence, or near to the officer of the SEC as to seriously interrupt or obstruct the proceedings. This includes disrespect towards the hearing panel or officer, offensive acts towards others, and other contumacious acts. Persons found to be in direct contempt shall be punished in accordance with the penalties prescribed by the Rules of Court. The officer of the SEC may ask for assistance with law-enforcement agencies in carrying out the exercise of SEC’s disciplinary authority. The SEC may, after observance of due process, cite or punish any person for indirect contempt on any grounds provided for in the Revised Rules of Court. (Rule VII, 2006 Rules of Procedure of the SEC).

A caveat, however, must be considered on the power to cite in contempt of any body or tribunal. As held by the Supreme Court, the power to punish for contempt is to be exercised on the preservative and not on the vindictive principle. Only occasionally should it be invoked to preserve that respect without which the administration of justice will fail. The contempt power ought not to be utilized for the purpose of merely satisfying an inclination to strike back at a party for showing less than full respect for the dignity of the court. ([G.R. 112869. January 29, 1996.] Kelly R. Wicker and Atty. Orlando A. Rayos, petitioners, vs. Hon. Paul T. Arcangel, as Presiding Judge of the RTC, Makati, Branch 134, respondent.)

GREENWICH Pizza Corp. has embarked on a new marketing strategy, investing hard-earned cash to attract young professionals.

The pizza restaurant operator, a unit of Jollibee Foods Corp., has also opened its 244th store Tuesday.

SEC OKs Asian Hospital, Health Care merger

THE Securities and Exchange Commission has approved the merger of Asian Hospital Inc. and Health Care Properties Inc. with the former as the surviving entity.

PHILIPPINE stocks fell, posting their first back-to-back loss in three weeks. Megaworld declined after interest rates climbed for the fifth time since May.

SAN Miguel Corp. (SMC), Southeast Asia’s largest food and beverage conglomerate, will likely go into a massive propagation of the lowly malunggay—Moringa oleifera—as part of efforts to help government fight hunger and poverty.

A company specializing in enterprise security solutions said yesterday that ways in protecting the enterprise is now experiencing a paradigm shift.

The Securities Regulation Code of 2000 has provisions on the powers and functions of the SEC to issue cease and desist orders (CDO) to prevent fraud or injury to the investing public (Section 5 (i) of the SRC) and to punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions of and penalties prescribed by the Rules of Court (Section 5 (j) of the SRC).