THE Securities and Exchange Commission (SEC) is seeking new power to compel banks to stop wire transfers of money suspected as coming from investment scams.
SEC Chairman Teresita J. Herbosa said they are pushing for the amendment of the Securities and Regulation Code, so the private-sector regulator could have more teeth and stop criminals falsely promising high return.
Herbosa said the present code only allows the SEC to issue advisories to discourage the public from taking part in irregular investment activities involving securities. The only other action by the regulator is to issue cease-and-desist orders against alleged investment con artists.
In other countries, the SEC’s counterpart corporate watchdog has the power to stop wire transfers.
“We see the need to go proactive in curbing investment scams. I learned in the US that they actually have a system, which would trigger all [government] agencies involved, in running after investment scams to take note of the complaint within 24 hours, and be able to notify a recipient bank to stop the wire transfer,” Herbosa told reporters.
She said the agency will call for the filing of the said amendment once Congress resumes its session in May. Herbosa said the SEC also wants the said powers other agencies already have. She cited the Bureau of Internal Revenue, which has the power to go against erring taxpayers, and the Anti-Money Laundering Council, which has the authority to freeze assets suspected acquired via illegal means.
Herbosa said the agency’s lack of power to go after confidence men is the main reason many victims of investment do not come out in the open. “Why would they lodge a complaint when they can no longer recover their money? In other instances, the money they have invested is already sent abroad, where the Philippines no longer has jurisdiction,” she said. “But if there is already a law that would grant us this power, then we would be able to notify a recipient bank to stop the wire transfer.”
Herbosa explained if the money is deposited by the investment scammer, “then the recipient bank, upon the SEC’s direction could immediately stop and not receive it, so it goes back to the victim.” Previous efforts by the SEC to amend the SRC focused on the definition of a security as the investment instrument have evolved and redefined, sadly, mainly by investment scammers.