Facts:

The case involves Carlos S. Palanca IV and Cognatio Holdings, Inc. as petitioners against RCBC Securities, Inc. (RSI) as the respondent. The events leading to this case began in December 2011 when RSI discovered that one of its sales agents, Mary Grace Valbuena, was involved in questionable trading transactions. Following an internal investigation, RSI terminated Valbuena and was subsequently penalized by the Market Regulation Department of the Philippine Stock Exchange (PSE-MRD) with a fine of P5,000,000.00 for violations related to Valbuena's actions. Palanca and Cognatio, who were clients of RSI, claimed to have been defrauded by Valbuena's dealings. However, their claims were rejected by RSI, which argued that Palanca, being a seasoned trader, should have been more vigilant.

On June 5, 2012, the petitioners sent demand letters to RSI for the return of their cash balances and stock positions, which RSI denied, reiterating that it had no outstanding liabilities to...

Facts:

Parties Involved:

• Petitioners: Carlos S. Palanca IV and Cognatio Holdings, Inc.
• Respondent: RCBC Securities, Inc. (RSI)

Background:
RSI is a Philippine corporation engaged in securities brokerage and trading. Petitioners, Carlos S. Palanca IV and Cognatio Holdings, Inc., were clients of RSI. In December 2011, RSI discovered that one of its sales agents, Mary Grace Valbuena, was involved in questionable securities trading transactions. RSI terminated Valbuena and filed criminal and civil cases against her. The Philippine Stock Exchange's Market Regulation Department (PSE-MRD) imposed a ₱5,000,000 penalty on RSI for violating securities laws.

Petitioners' Claims:
Petitioners alleged that they were defrauded by Valbuena and demanded the return of their cash balances and stock positions from RSI. RSI rejected their claims, arguing that Palanca, as a seasoned trader, abetted Valbuena's deviations.

Legal Proceedings:

1. Petitioners filed separate cases for Specific Performance with Damages against RSI in the Regional Trial Court (RTC) of Makati City, which were dismissed.
2. Petitioners filed Requests for Assistance with the Capital Markets Integrity Corporation (CMIC), seeking documents related to their trading accounts. CMIC denied the requests, citing prescription and res judicata.
3. Petitioners appealed to the Securities and Exchange Commission (SEC), which reversed the CMIC’s decision and ordered RSI to produce the documents.
4. RSI appealed to the Court of Appeals (CA), which reinstated the CMIC’s decision, prompting the petitioners to file a Petition for Review before the Supreme Court.

Issue:

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Ruling:

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Ratio:

1. Nature of Requests: The Requests were not complaints but administrative requests for documents under Article IX, Section 1 of the CMIC Rules. They did not trigger an investigation and were not subject to prescription.
2. Res Judicata: The PSE-MRD decision addressed RSI’s administrative liability, while the Requests pertained to RSI’s contractual obligations to its clients. The RTC cases were dismissed for procedural reasons and did not constitute a judgment on the merits.
3. Forum Shopping: The Requests sought different reliefs and were not an attempt to split causes of action. The petitioners merely sought access to their trading records to support their claims.

The Court emphasized the principles of investor protection and full disclosure under the Securities Regulation Code (SRC) and ruled that procedural rules should not hinder the enforcement of substantive rights.