Securities Regulation R.A.

8799
Atty. Justina F. Callangan

Declaration of State Policy

establish

a socially conscious, free market that regulates itself encourage the widest participation of ownership in enterprises enhance the democratization of wealth promote the development of the capital market

Declaration of State Policy

protect

investors ensure full and fair disclosure about securities minimize if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market

Powers and Functions of the SEC

regulatory adjudicatory SEC

has the incidental power to conduct adm. hearings and make decisions in the course of the performance of its regulatory and law enforcement functions.

If a case requires decision or resolution of a violation or conflict brought about in connection with the performance of a regulatory function, then it is one for the SEC to decide for the best interest of the public. But if the case is adversarial in nature, which calls for the adjudication of private rights and obligations, then the question is for the regular courts to decide.

SRC
1.

Has jurisdiction and supervision over all corporations, partnerships or associations who are grantees of primary franchises and/or a license or permit issued by the govt;

Sec. 47

Validate

the transfer of securities by bookentries rather than the delivery of physical certificates; Establish when a person acquires a security or interest therein and when delivery of a security to a purchaser occurs; Establish which records constitute the best evidence of a persons interests in a security and the effect of any errors in electronic records of ownership;

Sec. 47

Codify

the rights of investors who choose to hold their securities indirectly thru a registered clearing agency and/or other securities intermediaries; Codify the duties of securities intermediaries (including clearing agencies) who hold securities on behalf of investors; and

Sec. 47

Give

1st priority to any claims of a registered clearing agency against a participant arising from a failure by the participant to meet its obligations under the formers rules in respect of the clearing and settlement of transactions in securities, in a dissolution of the participant and any such rules and regulations shall bind the issuers of securities, investors in the securities, any third parties with interests in the securities and the creditors of a participant of a registered clearing agency.

Sec. 8.5

May audit the FS, assets and other

info of a firm applying for registration of its securities whenever it deems necessary to insure full disclosure or to protect the interests of the investors and the public.

SRC
2.

3.

Formulate policies and recommendations on issues concerning the securities market, advise Congress and other govt. agencies on all aspects of the market and propose legislation and amendments thereto; Approve, reject, suspend, revoke or require amendments to RS and registration and licensing applications;

SRC
4.

5.

6.

Regulate, investigate or supervise the activities of persons to ensure compliance; Supervise, monitor, suspend or take over the activities of persons to ensure compliance; Supervise, monitor, suspend or take over of exchanges, clearing agencies and other SROs;

SRC
7.

8.

Impose sanctions for the violation of laws and the rules, regulations and orders issued pursuant thereto; Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and provide guidance on and supervise compliance with such rules, regulations and orders;

SRC
9.

10.

Enlist the aid and support of and/or deputize any and all enforcement agencies of the govt., civil, military as well as any private institution, corp., firm association or person in the implementation of its powers and functions under the Code; Issue CDO to prevent fraud or injury to the investing public;

SRC
11.

12.

Punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions of and penalties prescribed by the Rule of Court; Compel the officers of any registered corporation or association to call meetings of stockholders or members thereof under its supervision

SRC
13.

Issue subpoena duces tecum and summon witnesses to appear in any proceedings of the Com. and in appropriate cases, order the examination, search and seizure of all documents, papers, files and records, tax returns and books of accounts of any entity or person under investigation as may be necessary for the proper disposition of the cases before it;

SRC
14.

15.

Suspend or revoke, after proper notice and hearing the franchise or certificate of registrations of corps., partnerships or asso., upon any of the grounds provided by law; and Such other powers as may be provided by law as well those which may be implied from or which are necessary or incidental to the carrying out of, the express powers granted the Com. to achieve the objectives and purposes of these laws.

Securities required to be registered

1.

Exempt securities (Sec. 9, SRC) a. any security issued or guaranteed by the govt of the Phil or by any pol. subd. or agency thereof or by any person controlled or supervised by , and acting as an instrumentality of said govt.

Securities required to be registered

b.

Any security issued or guaranteed by the govt of any country with which the Phil. maintains diplomatic relations or by any state, province or pol. subd. thereof on the basis of reciprocity

Securities required to be registered

c.

d.

e.

Certificates issued by a receiver or by a trustee in bankruptcy duly approved by the proper adjudicatory body Any security or its derivatives the sale or transfer of which , by law, is under supervision and regulation of the OIC, HLURB or the BIR Any security issued by a bank except its own shares of stock

Rule 9, SRC

Securities required to be registered

f.

Any evidence of indebtedness issued by a financial institution itself that has been licensed by the BSP to engage in banking/quasi-banking activity

Rule 9, SRC

Securities required to be registered

g.

Evidence of indebtedness issued to the ff primary institutional lenders:

Banks including their trust accounts wherein the trustee is granted discretionary powers in the investment disposition of the trust funds Investment houses including their trust accounts wherein the investment housetrustee is given discretionary powers in the investment disposition of the trust funds

Rule 9, SRC

Securities required to be registered

trust

companies financing companies investment companies pre-need companies non-stock savings and loan associations building and loan associations

Rule 9, SRC

Securities required to be registered

venture capital corporations insurance companies govt. financial institutions pawnshops pension and retirement funds approved by the BIR edu. assistance funds established by the natl. govt other entities that may be classified as PIL by the BSP, in consultation with the SEC

Rule 9, SRC

Securities required to be registered

provided

all such evidence of indebtedness shall only be negotiated or assigned to any of the above PILs or the DBP with respect to private dev. banks in relation with their discounting privileges that in case of non-banks without underwriting licenses, such negotiation or assignment shall be thru banks or nonbanks licensed to be an underwriter or a securities dealer

Rule 9, SRC

Securities required to be registered

that

in no case shall said instrument be negotiated or assigned to non-qualified buyers

h.

Bills of exchange arising from a bona fide sale of goods and services which are distributed and/or traded by banks or investment houses duly licensed by SEC and BSP thru an organized market properly conventioned and governed by rules approved by the appropriate regulatory body

Rule 9, SRC

Securities required to be registered

i.

Evidence of indebtedness (short and long term) meeting the ff. conditions: issued to not more than 19 noninstitutional lenders payable to a specific person neither negotiable nor assignable and shall be held on to maturity in an amount not more than P50M

Securities required to be registered

2.

Exempt transactions sale of any security in any of the ff. transactions: a. At any judicial sale, or sale by an executor, administrator, guardian or receiver or trustee in insolvency or bankruptcy

Securities required to be registered

b.

By or for the amount of a

Pledge

holder or Mortgagee or Any similar lien holder Selling or offering for sale or delivery in the ordinary course of business and not for the purpose of avoiding the provisions of the SRC

Securities required to be registered

c.

Isolated transaction
Sale

is made by the owner itself (available to issuer as an owner (thereof)) Not made I the course of repeated and successive transaction of a like character The said owner is not the underwriter of the security

Securities required to be registered

d. e.

f.

Stock dividend declarations Sale of shares to stockholders where no commission or other remuneration is paid directly or indirectly Issuance of bonds secured by mortgage upon real estate or tangible personal property to a single purchaser

Securities required to be registered

g.

h.
i.

Transaction pursuant to a right of conversion Brokers transactions Pre-incorporation subscription or subscription to a capital increase

Securities required to be registered

j.

Exchange securities by the issuer with its existing security holders where no commission or other remuneration is paid directly or indirectly for soliciting for such exchange

Securities required to be registered

k.

l.

private placements (not more than 19 non-qualified (retail) buyers sale to any number of qualified buyers
Bank

Registered investment house

Securities required to be registered

Insurance

company Pension fund or retirement plan maintained by the Govt of the Phil. or any pol subd. thereof or managed by a bank or other persons authorized by the BSP to engage in trust functions Investment company

Securities required to be registered

such

other persons the SEC may be rule determine on the basis of financial sophistication networth knowledge and experience in financial and business matters or amount under management

REGISTRATION OF SECURITIES
1. 2. 3.

Definition Legal Basis Section 8, SRC Public Offer Defined

Via Publication Presentation in a Public or Commercial place Radio, TV ads or in any online/email system Distribution or making available flyers or any offering materials in a public or commercial place or mailing the same to prospective purchasers

Issues relative to Public Offers

No instruments are issued but deposits are accepted Repackaged (securitized registered instruments)

4.

Merit vs. Full Disclosure Regime

Approval Rendered Effective

5.

When Does disclosure begin and end?

Begins at registration Continues periodically thru periodic reports May be suspended when on the 1st day of the fiscal year, it has less than 100 shareholders (SRC Rule 17.1(1) Does not end once a reporting company, it remains as such even when registration of securities has been revoked (SRC Rule 13(5) EPD revocation of primary license except hosp./edu. inst.

6.
i. ii.

Reporting Companies
Registered Issuers Listed Companies Public Companies at least P50M total assets at least 200 shareholders, each holding at least 100 shares PVB Case (SC affirmed CFDs position that it is a public co. but penalties were ordered to be reckoned from the time the bank was first notified of the violation. Its on appeal with the SC) Hospitals/ educational institutions different scale of penalties

iii.

SEC Form 17-EX - number of holders is reduced to 100 every beginning of the FY stops after 90 days from notice
7.

Registration Requirements (Substantive/Procedural)

i.

Legal basis of Registration

Sec. 8, SRC

ii.

Legal basis for Registration Requirements

Sec. 12, SRC, SRC Rule 12 Sec. 68.1 Annex C Various SEC Orders/Memo. Circulars

iii.

What to Register?
Shares to be Offered to the Public All issued and outstanding shares if Registrant is going IPO Going listing by way of Intro. Public co. going IPO/LBWI

iv.

Sec Cert re: adoption of a Manual of Corp. Governance Manual of Corp. Governance Others depending on the type of securities being registered, i. e., - committed credit line - rating - ECC - TCT - House/membership rules - Notarized undertaking to refund investments Shelf-Registration - defined

8.

The Registration Statement

i.

Contents

Cover Sheet Part I Info required into the Prospectus

Risk Factors Use of Proceeds Risk Disclosure Statement - General Risk Warning - Prudence Required - Professional Advice Determination of offer price Dilution Selling security holders Plan of distribution Other distributions Underwriters compensation Underwriters rep. to the board Designated shares and allocations Brokers/dealers compensation Finders Interest of named experts and independent counsel

Info with respect to registrant

Business - Business Development - Business of the Issuer - major risks involved in each business of the company and subsidiaries; procedure on how to identify, assess and manage such risks - additional requirements Properties Legal Proceedings Market for Issuers common equity and related stockholders matters - market info - holders - dividends - recent sales of unregistered or exempt securities, incl. recent issuance of securities constituting exempt transactions

MD & A and Plan of Operation Changes in and disagreements w/ accountant on acctg. and financial disclosures External audit fees Directors and Executive Officers
- Significant Employee/s - Family Relationships - Involvement in certain legal proceedings

Executive compensation Security Ownership of certain record and beneficial owners Security ownership of management Voting trust holders of 5% or more Certain relationships and related transactions

ii.

Rejection / Forfeiture of Fees Refund of Fees

iii.

Letter-request CFD endorses it to FMD with recommendation CFD presents it to en banc Application to future fees/penalties Maximum 50% of the fees paid

iv.

Disclosures Required after RS is rendered effective (most neglected) SEC Form 23-A

Persons required 10% beneficial owner of any class of any security or director (even if only qualifying share is owned) or officer (even if he has no security at all) after becoming such Due date within 10 days after the effective date of the RS or after he becomes such subsequent to the effective date of the RS whichever is earlier First SEC Form 17-Q either within 45 days after the effective date of the RS or on or before the date on which such report would have been required to be filed if the issuer had been required previously to file it whichever is later

Within 3 days from closing of the sale

i. ii.

dispositions of secondary shares number/percentage disclosure on over-allotment

Wide Dissemination (Sec. 8.3)

i. ii.

iii.
iv.

Each participants (underwriters, brokers) Main & EOs of the SEC Exchange if to be listed 20 or more persons (non QBs)

v.

Amendments when on the face of the RS, it is incomplete, inaccurate in any material respect, i.e.,

any event or transaction which increases and creates a risk on the investments or on the securities covered by it increase/decrease in the volume of securities issue price is outside of the range major change in the primary business reorganization of the company change in the work program or use of proceeds loss, deterioration or substitution of the property underlying the securities significant or 10% or more change in the financial condition or results of operation of the registrant classification/declass or reclass of securities which results in derogation of rights

Requirements

File ARS Notice for publication (changes and reason for the changes) Offer to rescind all transactions Investors may renounce their purchases within 30 days from notice Return of investments (w/o any deduction) within 10 days from notice (in Subic Bay Golf vs. SEC, the SC decided that the SEC cannot order a refund of investments. The power belongs to the regular courts) Filing fee min. of P10K (if volume is increased, 1/10 of 1% of the difference)

Deviation from the use of proceeds Required: Prior notice to SEC and stockholders 30 days from implementation

9.

Periodic Reports
i.

Annual
Due date depends on where it is filed (for 2009 AFS filings)

Extension Office April 14/15 Main Office per MC depends on the last numerical digit of the filers SEC Reg. No.
1&2 3&4 7&8 9&0

For 2011 Filings April 14, 15, 18, 19,20 April 25 29 May 9 13 May 16 20

Those with FY other than Dec. 31 original filing schedule

Filings of any company may be made before April 18 Late filings allowed starting May 23 and shall be subject to penalty computed from the date of the last day of filing schedule above. No SEC form 17-L allowed

POST-REGISTRATION DISCLOSURES

Via Periodic Reports/Other Forms

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

SEC Form 17-A SEC Form 17-Q SEC Form 17-C SEC Form 17-Ex SEC Form 17-L SEC Form 18-A SEC Form 18-AS SEC Form 23-A SEC Form 23-B SEC Form 20-IS SEC Form 19 SEC Form 10-1 For SOP/SPPs - annual report of optionees/purchasers & shares purchased

Tender Offer Report

At least 35% acquisition in a single transaction TO to all holders; if oversubscribed, distributed pro rata At least 35% acquisition within 12 mos. - to all holders of such class for the number of shares so acquired within the said period. The last sale meeting the threshold shall not be consummated until the closing and completion of the TO. Less than 35% acquisition but the acquisition will result in ownership of over 51% of the total outstanding equity shares TO to all remaining shareholders at a price supported by a fairness opinion provided by an independent financial advisor or equivalent 3rd party Acquirer is required to accept all securities tendered. Sale of shares pursuant to a private transaction shall not be completed prior to closing and completion of the TO. (exemptive relief is available)

OTHER OBLIGATIONS
i.

Post-IPO issuances

if sold under SRC Rule 10.1 SEC Form 10-1 must be filed as a notice for k (private placement or to 19 or less non-qualified buyers) and l transactions (to any number of qualified buyers) or as a request for confirmation of exemption sold to shareholders but with cost registrable if sold anew to the public (more than 19 nonqualified buyers), registrable

Exemption may be obtained pursuant to SRC Rule 10.2 for issuances to more than 19 non-qualified buyers (limited offer/small amount)

Qualified buyers under Sec 10.1(l)

bank registered IH insurance company pension fund or retirement plan maintained by the GOP or any pol. Subdivision thereof or managed by a bank or other persons authorized by the BSP to engage in trust functions such other persons as the Com. may by rule determine on the basis of financial sophistication, net worth and experience in financial and business matters or amount of assets under mgt.

Qualified buyers under SEC MC No. 6, s. of 2007

Individuals
i.has a min.

AGI of P25M for at least 2 yrs prior to regis. or ii.a total portfolio investment in securities registered with the Com. of at least P10M or iii.a personal net worth of not less than P30M and

been engaged in securities trading, in his personal capacity or thru a FM, for a period of 1 yr. or held for at least 2 yrs. a position of responsibility in any professional or business entity that requires knowledge or expertise in securities trading, such as legal consultant, financial adviser, sales person or associated person of broker-dealer or finance, treasury or trust officer of a bank or other executive positions with related responsibilities.

Juridical person
i.

has a min. AGI of at least P100M for at least 2 yrs. prior to regis. Or
portfolio investment in securities registered with the Com. of at least P60M or not less than P100M.

ii.a total

iii.a net worth of

REMEDIES
Request for Opinion P5000.00 fee

Request for Exemptive Relief P20,000.00 fee

Request for confirmation under SRC Rule 9.1 P20,000.00

Request for confidentiality

Company-initiated offer of monetary penalty in lieu of suspension

Some manipulative devices

1.

Wash sale

when stocks are traded without a genuine change in actual beneficial ownership making it appear that the stock is actively traded when both the buy and sell orders are entered at the same time with the same price and quantity by different but colluding parties, giving the appearance of active trading of the shares

2.

Improper matched order

Some manipulative devices

3.

Marking the close

placing an order near the close of the trading day in an effort to close the price higher or lower than the previous price buying activity at increasingly higher (or lower) prices and then selling securities in the market at the higher (or lower) prices after announcing a glossy picture of a particular issue as a good investment contrived to sustain public interest in the shares and thus lure investors to trade

4.

Hyping and dumping the stock

Some manipulative devices

5.

Squeezing the float

taking advantage of a shortage of securities in the market by controlling the demand side and exploiting market congestion during such shortages in a way as to create artificial prices placed to protect a recognized gain in the price of securities against potential loss. It reflects the lowest price that a seller is willing to sell at even though this is lower than the current market price. It is a hedge against market decline.

6.

Stop loss order

Some manipulative devices

7.

8.

Painting the tape a series of transactions in securities that are reported publicly to give the impression of activity or price movement in a security Circulating unverified rumor-based information

Some manipulative devices

9.

Short selling

selling stocks which he does not own, in anticipation that the price will decline and that he will be able to cover the sale by purchasing them back at a later date at a lower price

10.

Repurchase(buy back) of outstanding stock by issuers

Fraudulent transactions
1.

Churning

situation where a broker-dealer (B/D) is the sole or dominant market-maker in a particular security and creates a market in that security by repeated purchases from and resells to, its individual retail customers at steady increasing prices

Fraudulent transactions
2.

Scalping

where a B/D or investment banker recommends the purchase of securities w/o disclosing its practice of purchasing of such securities before making the recommendation and then selling them at a profit when the price rises after the recommendation is disseminated

Fraudulent transactions
3.

Single day trading practice

buying and selling shares in a single trading session, where the investors settle their accounts at the end of the day. Day traders usually follow a trend of buying activity on a particular stock and then sell the same issue on the same day after a profit has been realized even w/o any cash outlay.

Fraudulent transactions
4.

Front-running

where brokers, also acting as dealers, prioritize their own dealer accounts by executing their own orders on a particular issue ahead of their clients.

5.

6.

use of information obtained in fiduciary capacity for the purpose of soliciting or making purchases, sales or exchanges of securities others under SRC Rule 26.3-2

Insider Trading
Trading

of securities on a material non-public information

Insider
Issuer A

director or officer (or person performing similar functions) of, or person controlling the issuer Person whose relationship or former relationship to the issuer gives or gave him access to material information about the issuer or the security that is not generally available to the public

Insider

Person whose relationship or former relationship to the issuer gives or gave him access to material information about the issuer or the security that is not generally available to the public A government employee or director or officer of an exchange, clearing agency and/or selfregulatory org. (SRO) who has access to material info about an issuer or a security that is not generally available to the public A person who learns each info by a communication from any of the foregoing insiders

Material non-public info

Has

not been generally disclosed to the public and would likely affect the market price of the security being disseminated to the public and the lapse of a reasonable time for the market to absorb the info Would be considered by a reasonable person important under the circumstances in determining his course of action whether to buy, sell or hold a security

Tipee
A

person who receives inside info from persons such as an officer or director. Its unlawful for one to tip material non-public info to another that trades thereon. However, there is no violation if it is a legitimate disclosure to another as part of performing ones duties to the issuer with no expectation that the person learns of the info is likely to trade.

Short

swing Profits earned within 6 mons. of a trade including profits made from a sale of security followed by their purchase within 6 mos.

Rule 23.2
Any

profit realized by a beneficial owner, director of officer from any purchase and sale or any sale and purchase of any equity security of such issuer within any period of less than 6 mos. shall inure to and be recoverable by the issuer, irrespective of any intention of holding the security purchased or of not repurchasing the security sold for a period exceeding 6 mos.

Who may institute suit?

By

the issuer or By the owner of any security in the name and in behalf of the issuer if the issuer shall fail diligently to prosecute the same thereafter

When?
Within

2 years after the date such profit was realized

Protection to investors

Mandatory Tender Offer Rule TO - is a publicly-announced intention by a purchaser to acquire a certain block of equities of a company thru open market purchases or private negotiations. Sec. 19, SRC MTOs - any person or group of persons acting in concert who intends to acquire 35% or more equity shares in a public company in one or more transactions within a 12mo period or less than 35% which would result in ownership of over 51% of the total outstanding equity securities of a public company (at a price supported by a fairness opinion provided by an independent financial advisor r equivalent third party.

 tender

for the percent sought to all holders of such class if TO is oversubscribed, the aggregate amount of securities to be acquired at the close of such TO shall be proportionately distributed across both selling shareholder with whom the acquirer may have been in private negotiations and minority shareholders.

Exempt from MTO Requirement

any

purchase of shares from the unissued capital stock provided that the acquisition will not result to a 50% or more ownership of shares by the purchaser any purchase of shares from an increase in authorized capital stock purchase in connection with privatization undertaken by the govt. of the Phil.

Exempt from MTO Requirement

purchases

in connection with corp. rehab under court supervision purchase thru an open market at the prevailing market price merger or consolidation

UCC - Listed

UCHC 60.51% Non-listed

CEMCO 17.03%

BCI 21.31%

ACC 29.69%

CEMCO 9%

CEMCO acquired BCI and ACCs shares (51%) in UCHC

CEMCOs total Beneficial Ownership in UCC Particulars Existing ownership in UCHC Acquisition from BCI and ACC % of UCHCs ownership in UCC Indirect ownership of CEMCO in UCC Direct of CEMCO in UCC Total ownership Percentage 9% 51% 60% 36% 17% 53%

Rules on proxy solicitation

Proxy

must be in writing signed by the stockholder or his authorized rep. and filed with the corp. sec. before the meeting valid only for the meeting for which it is intended valid for not more than 5 yrs.

Rules on proxy solicitation

Proxy

solicitation any request for proxy or authorization any request to execute or not to execute or to revoke a proxy or authorization or the furnishing of a form of proxy or other communication to security holders under reasonably calculated to result in the procurement, withholding or revocation of a proxy

Does not apply to

the

performance by any person of ministerial acts on behalf of a person soliciting proxy or any solicitation made otherwise than on behalf of the registrant where the total number of persons solicited is not more than 19.

 Obligation

of a Registrant Proposing to Hold Stockholders Meeting to stockholders at least 15 days before the meeting An Information Statement A proxy form (in case of proxy solicitation) Management report

Transmit

Civil Liabilities
A.

On account of false registration statement

Person liable
Issuer

and every signatory A director of or person performing similar functions, or a partner in, the issuer at the time of the filing of the RS or any part, supplement or amendment thereof Every person who is named in the RS as being or about to become a director of, or a person performing similar functions or a partner in, the issuer and whose written consent thereto is filed with the RS

 every

auditor or auditing firm named as having certified any financial statements used with the RS or prospectus every person, who with his written consent, which shall be filed with the RS, has been named as having prepared or certified any part of the RS, or as having prepared or certified any report or valuation which is used in connection with the RS, with respect to the statement or valuation, which purports to have been prepared or certified by him every selling shareholder who contributed to and certified as to the accuracy of a portion of the RS, with respect to that portion of the RS which purports to have been prepared or certified by him Every underwriter with respect to such security

Civil Liabilities
B.

Arising in connection with prospectus, communications and reports Who is liable? Any person who offers to sell or sells a security by means of a prospectus or other written or oral communication which includes An untrue statement of a material fact or Omits to state a material fact necessary in order to make the statements not misleading (the purchaser not knowing of such untruth or omission) and who shall fail in the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission

 To whom is he liable?

To the person purchasing such security from him.

How much can he recover? The consideration paid for such security with interest thereon less the amount of any income received thereon, upon the tender of such security or for damages if he no longer owns the security.

Civil Liabilities
For fraud in connection with securities transactions Any person who engages in any act or transaction in violation of Secs. 19,2, 20 or 26 or any rule or regulation thereunder shall be liable to any person who purchases or sells any security, grants or refuses to grant any proxy, consent or authorization, or accepts or declines an invitation for tender of a security, for damages sustained by such other person as a result of such act or transaction.
C.

Civil Liabilities
D.

For manipulation of security prices

For violation of Sec. 24, he shall be liable to any person who shall purchase or sell any security at a price which was affected by such act or transaction, and the person so injured may sue to recover damages sustained as a result of such act or transaction.

Civil Liabilities
E.

On account of insider trading For violation of Subsection 27.1 and Subsection 27.4(a)(i) or any rule thereunder shall be liable in a suit brought by any investor. An insider who violates Subsec. 27.3 or any person in case of a tender offer who violates Subsec. 27.4(a) or any rule thereunder shall be jointly liable under Subsec. 61.1 with, and to the same extent as, the insider, or person in the case of a tender offer, to whom the communication was directed and who is liable under Subsec. 61.1 by reason of his purchase or sale of a security.

Civil Liabilities
F.

Amount of damages to be awarded All suits to recover damages pursuant to Secs. 56, 57, 58, 59, 60 and 61 shall be brought before the RTC which can award not exceeding triple the amount of the transaction plus actual damages. Exemplary damages may also be awarded in cases of bad faith, malevolence or wantonness in violation of the Code and its IRR.

Civil Liabilities
It

can also award attorneys fees not exceeding 30% of the award. All persons specified in said sections shall be jointly and severally liable for the payment of damages.

Civil Liabilities
All

persons including the issuer shall contribute equally to the total liability adjudged therein. No principal shareholder, director or officer of the issuer or person performing similar positions shall recover their contribution to the liability from the issuer. However, the right of the issuer to recover from the guilty party the amount it has contributed shall not be prejudiced.