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A Study of the Securities Frauds in the Philippines from 1995 to 1999


Today, the Philippine Stock Exchange or PSE (the Manila and Makati stock exchanges consolidated in 1994) has assumed a new stature as the nation's capital market, a place where private companies source interest-free funds with which to expand their businesses or to venture into new economic enterprises. The PSE has also become an attractive investment house where ordinary folk--from retirees to schoolteachers--put their hard-earned money. The PSE is the only stock exchange organization in the country licensed to regulate and monitor the trading of stocks, bonds, warrants and other derivatives. This bourse resembles a market place where thousands of people buy and sell stocks and bonds of leading Philippine corporations. This research looks into the various securities frauds that continue to discredit the stock market, with emphasis on insider trading and price manipulations. It also presents the status of securities fraud cases filed before the Securities and Exchange Commission (SEC) and Philippine Stock Exchange and the courses of actions these two regulatory bodies have undertaken. The study recommends control measures and specific action plans for the SEC, PSE, stock market participants, and the investing public. Fifteen specific action plans revolve around regulatory training, value formation, investor education, and computer technology. These recommendations, however, can also be the subjects of future studies.

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