COL Financial Group, Inc. v. Capital Markets Integrity Corp.

September 26, 2019SEC EN BANC CASE NO. 07-15-377COL FINANCIAL GROUP, INC., appellant, vs. CAPITAL MARKETS INTEGRITY CORPORATION, appellee.DECISIONThis is an Appeal of the Decisions dated 6 February 2015 and 1 June 2015 of the Capital Markets Integrity Corporation, where COL Financial Group, Inc. was held liable for violation of the Know-Your-Customer Rule, enshrined in both the CMIC Rules and the Amended Implementing Rules and Regulations of the Securities Regulation Code. RELEVANT FACTSThe CAPITAL MARKETS INTEGRITY CORPORATION (CMIC) is a Self-Regulatory Organization (SRO) that oversees broker-dealers.COL Financial Group, Inc. (COL FINANCIAL) is a domestic corporation, licensed as a broker-dealer of securities.On 2 July 2014, the CMIC sent a Letter to COL FINANCIAL, requiring the latter to explain suspicious trading activities pertaining to the 43 Million Double Dragon shares worth Php203 Million. The buying and selling were transacted through the trading accounts of spouses Jonathan and Cherryl Faith Gomez (Spouses Gomez) between 14 April 2014 and 16 May 2014.Although the CMIC was initially investigating the possibility of market manipulation through "hype-and-dump" and/or insider trading, it also highlighted...