G.R. No. 195542 - Securities and Exchange Commission vs. Santos

A purported investment opportunity was promoted by Performance Investment Products Corporation (PIPC-BVI) and its local affiliate, Philippine International Planning Center Corporation (PIPC Corporation).
The scheme involved selling an investment product called the “Performance Managed Portfolio” (PMP) that promised high returns (between 12% to 18% per annum) with a guarantee on the principal.
The investment required a substantial minimum amount, notably US$40,000, and subsequent larger remittances from investors.

The Securities and Exchange Commission (SEC) served as the petitioner, having brought forth complaints against various individuals and entities for alleged securities regulation violations.
Oudine Santos, employed as an investment consultant (and later claimed to be merely a clerical employee/information provider) of PIPC Corporation, was charged with having solicited investments from private complainants Luigi (Luisa Mercedes P. Lorenzo) and Ricky Albino P. Sy.
The scheme was further complicated by the deceptive use of two similar-sounding entities (PIPC Corporation and PIPC-BVI), which led investors to mistakenly believe they were dealing with a legitimate, licensed investment firm.

Private complainants detailed how Santos, through informal meetings and presentations, explained the employment of advanced trading strategies (involving major currencies such as the Japanese Yen, Euro, and British Pound) and assured them of safety and liquidity.
Investment transactions were executed via bank transfers (e.g., to ABN-AMRO Bank Hong Kong, Standard Chartered Bank, and RZB Austria, Singapore Branch) as directed by Santos, with all related communications documented in emails and printed brochures.
Investors received various documents, including Partnership Agreements, Fixed Deposit Advice Letters, and welcoming letters signed by Michael H.K. Liew, all of which contributed to the impression of a bona fide investment opportunity.

The SEC and subsequently the Department of Justice (DOJ) investigated allegations that the scheme involved the sale of unregistered securities in violation of Sections 8, 26, and 28 of the Securities Regulation Code (SRC).
Evidence showed that the promoters of the scheme deliberately created confusion regarding the true identity and registration status of PIPC Corporation and PIPC-BVI, thereby masking the illicit nature of their transactions.
Key documents and investor affidavits indicated that investors were misled by representations on security, liquidity, and guaranteed returns—promises that were instrumental in inducing their participation.

Santos asserted that she was never more than a clerical employee or a provider of information; she claimed not to have actively solicited or recruited investors.
She contended that any financial transactions occurred solely between the investors and PIPC-BVI, as evidenced by the investment documents that did not bear her signature or explicitly list her involvement.
Her defense further maintained that she did not exercise any decision-making power in the investment process, and any inducements were the result of representations made by other principal officers of the corporation.

Whether Santos acted merely as an employee/information provider or whether her conduct amounted to that of an agent soliciting investments.
The extent to which her actions—despite the absence of a formal agency contract or her signature on investment documents—created an implied agency relationship with PIPC Corporation and/or PIPC-BVI.

Whether the representations made by Santos induced investors like Lorenzo and Sy to commit substantial funds based on misleading information.
Whether the confusion created between the identities of PIPC Corporation and PIPC-BVI undermined the investors’ ability to make an informed decision.

Whether Santos’ actions, as allegedly engaging in the offer or sale of securities without proper registration, violate Section 28 of the SRC.
If her lack of registration as a broker, dealer, or salesman should render her criminally liable under the provisions governing the sale of unregistered securities.

The adequacy of the evidence—such as affidavits, bank transfer records, and printed brochures—in establishing that Santos’s conduct linked her to the actual solicitation and sale of securities.
Whether the absence of direct receipt of funds or the lack of a signed participation agreement absolves her from liability.