Businessman Joseph Calata, the company’s CEO, and Jose Marie Fabella, its corporate secretary, were found guilty of violating the Securities Regulation Code by issuing exaggerated claims that caused a dramatic spike in the company’s stock, the Securities and Exchange Commission said inaccurate statement that cited the ruling.
The court said their disclosure about the so-called “Mactan Leisure City” project was full of “unfounded promises and exaggerations,” including claims it would open by 2020 and earn over P55 billion annually.
On the day of that announcement, Calata’s shares saw trading volume surge by 2,455 percent, followed by another 196 percent jump the next day.
However, the company had not even applied for a casino license with the state-run Philippine Amusement and Gaming Corp. at the time. A second disclosure issued on August 26, 2016, was also found to be misleading because it failed to clarify if a permit application was underway.
The court ordered each executive to pay P4 million in fines or face prison if they fail to pay due to insolvency. It rejected the argument that no actual harm occurred.
“Actual loss or harm, much less actual public harm, is not an element of the offense. Thus, the Court reiterates that the evidence presented by the prosecution proves beyond a reasonable doubt the criminal liability of the accused,” the court ruled.
The ruling stemmed from an investigation by the Securities and Exchange Commission, which earlier charged eight other shareholders for market manipulation related to the same incident.
Calata was delisted from the Philippine Stock Exchange in 2017 after repeated violations of disclosure and trading rule
