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Title XVI - INVESTIGATIONS, OFFENSES, AND PENALTIES - Coggle Diagram

- - - - Section 157. Contempt.
        
        Section 158. Administrative Sanctions. -
        
        Section 159. Unauthorized Use of Corporate Name; Penalties
        
        Section 160. Violation of Disqualification Provision; Penalties
        
        Section 161. Violation of Duty to Maintain Records, to Allow their Inspection or Reproduction;
        
        Section 162. Willful Certification of Incomplete, Inaccurate, False; or Misleading Statements or Reports; -
        
        2 more items...
        
        Elements of Violation -
        
        Unjustified failure or refusal of the corporation, or by those responsible for keeping and maintaining corporate records
        
        To comply with Sections 45, 73, 92, 128, 177 and other pertinent rules and provisions of this Code on inspection and reproduction of records
        
        2 more items...
        
        Elements of Penalty -
        
        Director, trustee or officer has knowledge of the existence of a ground for disqualification as provided under Section 26, and
        
        Director, trustee or officer willfully holds office or willfully conceals such disqualification.
        
        Sec. 26 Grounds for Disqualification -
        
        Convicted of final judgment:
        
        Of an offense punishable by imprisonment for a period exceeding six (6) years;
        
        For violating this Code;
        
        For violating the Securities Regulations Code
        
        Found administratively liable for an offense involving fraudulent acts
        
        This can be imposed by any government agency (not just the SEC) as long as it involves a fraudulent act.
        
        This finding does not require finality.
        
        Violations or misconduct similar to those enumerated in paragraphs (a) and (b) above by a foreign court or equivalent foreign regulatory authority
        
        Penalty -
        
        GR - P10k - 200k at the discretion of the court, AND
        
        Permanently disqualified from being a director, trustee or officer of any corporation.
        
        XCPN - When violation is injurious or detrimental to the public - Fine would range from P20k-P400k.
        
        Penalty - 10k - 200k fine
        
        Rules on Corporate Name (Sec. 17)
        
        Remedies Available to Corporation upon Unauthorized Use -
        
        File petition with SEC to compel other corporation to change it
        
        Court action not necessary
        
        SEC may order change of corp name
        
        File complaint against unauthorized use of its corporate name under RCC 159
        
        If corporate name is used as a trade name, file complaint for infringement of tradename
        
        Business or trade name different from corporate name shall be indicated in AOI
        
        Company may have more than 1 business or trade name
        
        Corp may use name other than its legal (corporate) name and carry on business in assumed name (business or trade)
        
        Enumeration of Imposable Sanctions -
        
        Imposition of a fine ranging from P5,000 to P2,000,000, and not more than P1,000 for each day of continuing violation but in no case to exceed P2,000,000
        
        Issuance of a permanent cease and desist order;
        
        Suspension or revocation of the certificate of incorporation; and
        
        Dissolution of the corporation and forfeiture of its assets under the conditions in Title XIV of this Code.
        
        Requisites for Exercise -
        
        After due notice and hearing,
        
        the Commission finds that any provision of this Code, rules or regulations, or any of the Commission’s orders has been violated,
        
        the Commission may impose any or all of the following sanctions, taking into consideration the extent of participation, nature, effects, frequency and seriousness of the violation:
        
        Requisites for Exercise -
        
        Any person, without justifiable cause, fails or refuses to comply with any lawful order, decision or subpoena
        
        Due notice and hearing
        
        Extent of Contempt -
        
        An amount not exceeding P30,000
        
        A daily fine of P1,000 until the order, decision or subpoena is complied with
        
        When the refusal amounts to clear and open defiance of the Commission’s order, decision or subpoena
      - Cease and Desist Orders - May be issued upon concurrence of the following requirements:
        
        When there is reasonable basis to believe that a person has violated or is about to violate the Code, a rule, regulation or order of the SEC
        
        To enjoin an act or practice which is:
        
        Fraudulent
        
        Or can be reasonably expected to cause significant, imminent and irreparable danger or injury to public safety or welfare
        
        Ex Parte C&D Orders - Under Sec. 156, the SEC can only issue cease and desist orders ex parte when the act sought to be restrained is fraudulent or can be reasonable expected to cause significant, imminent and irreparable danger or injury to public safety welfare
        
        Divina: It is submitted that the same may also be issued to enjoin an actual or threatened violation of the RCC and any rule, regulation or order of the SEC.
        
        This is consistent with the thrust of the RCC to strengthen the regulatory powers of the SEC.
        
        Validty of Ex Parte C&D Orders -
        
        GR - Maximum period of 20 days
        
        XCPN - Without prejudice to the order being made permanent after due notice and hearing
    - - Q. Who are liable for fines imposed by the SEC?
        
        RP - Mixed fines. Look at specific language of the provision, under Sec. 157, can be corporation or, if order, pertains to director or officer, them directly.
        
        Typically, corporation shoulders the corporation. Because, fining yourself representing shareholdings in the corporation.
        
        Q. W/N Imposition of fines and then give fines to person seeking redress/monetary claim proper?
        
        A - Those acitons would be civil complaints.
        SEC Jurisdiction is only as regards administrative and regulatory sanctions.
        
        RP - What about in case of refunds in Subic Bay?
        
        A - There, the case is civil or intra-corproate in nature. Thus, SEC would not have power to impose a fine and give the fine to the stockholders, because then would be circumventing
        
        RP - Sec. 175 provides that fines are collected and deposited for SEC modernization/operational expenses fund.
  - - - Requisites for Publication -
        
        Publication should be as may be relevant to the general public or to the parties concerned
        
        Subject to the provisions of RA 1073 or the Data Privacy Act of 2012 and other pertinent laws
        
        Notice requirement
        
        Notice - The Commission shall give reasonable notice to and coordinate with the appropriate regulatory agency prior to any such publication involving companies under their special regulatory jurisdiction.
- - - - If the relationship is merely incidental to the controversy, or if there will still be conflict even
        
        if the relationship does not exist → no intra-corporate controversy
    - - Management Committee - SEC may create a management committee to perform and discharge for a period of one month the functions of the Management Committee under the Interim Rules.
        
        Scope of Power - Power of supervision includes power to create a management committee following the doctrine of necessary implication