Case Summary (G.R. No. 172727)
Investment and Agreement
In 1995, Guillermo Mendoza, Jr. and Oniler Lontoc, associated with QTCI, persuaded respondent Thomas George to invest. On July 7, 1995, George signed a Customer's Agreement with QTCI, which included a Special Power of Attorney designating Mendoza as his attorney-in-fact. Following a CDO from the SEC on June 20, 1996, George requested the return of his investment but received no response, prompting him to seek legal action.
Complaint and Defenses
On February 4, 1998, George filed a complaint with the SEC for recovery of his investment and damages against QTCI, Lau, and Collado, as well as against Mendoza and Lontoc, who were unlicensed salesmen. Petitioners denied the allegations, asserting that they employed properly licensed individuals to manage accounts and claiming that George should pursue claims against Mendoza and Lontoc.
SEC Decision
The SEC Hearing Officer issued a decision favoring George, ordering petitioners to reimburse his investments, including the payment of damages and legal fees. Petitioners appealed this decision to the SEC en banc, but the appeal was dismissed due to technical deficiencies.
Court of Appeals Ruling
Upon petitioning the Court of Appeals, the court upheld the SEC's findings, ruling that the petitioners had violated the rules governing commodity futures trading by allowing unlicensed individuals to handle George's account. The appellate court affirmed the SEC's decision without remanding the case back due to jurisdictional issues.
Petitioners’ Arguments
In their petition for review, Lau and Collado argued that the CA erred in finding them complicit in permitting an unlicensed trader to manage George's account. Additionally, they contended that they were unfairly held solidarily liable for the damages awarded.
Findings on Personal Liability
The court affirmed that although corporate officers are normally shielded from personal liability, Lau and Collado were found to have acted with gross negligence in managing QTCI, thereby justifying their joint liability with the corporation for the returns owed to George. Their failure to uphold regulatory compliance led to their responsibility for the damages awarded.
Awards for Damages
The court sustained the SEC's awards for moral and exemplary damages, emphasizing that moral damages c
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Case Overview
- This case involves a petition for review on certiorari filed by Queensland-Tokyo Commodities, Inc. (QTCI), Romeo Y. Lau, and Charlie Collado, challenging the decisions of the Court of Appeals regarding a complaint for recovery of investment.
- The complaint was initiated by Thomas George, who sought the return of his investments after realizing that the brokers handling his account were unlicensed.
- The Securities and Exchange Commission (SEC) made a ruling in favor of George, leading to subsequent appeals by the petitioners.
Background Facts
- QTCI is a licensed broker engaged in trading commodity futures.
- In 1995, Guillermo Mendoza, Jr. and Oniler Lontoc of QTCI persuaded Thomas George to invest with them.
- On July 7, 1995, George signed a Customer's Agreement and a Special Power of Attorney, appointing Mendoza as his attorney-in-fact.
- Following a Cease-and-Desist Order issued to QTCI by the SEC in 1996, George sought to recover his investment but was initially ignored.
- He later discovered that the brokers managing his account were unlicensed.
Proceedings in the SEC
- George filed a complaint with the SEC in February 1998 against QTCI, Lau, and Collado, among others.
- The SEC Hearing Officer ruled in favor of George, mandating the petitioners to return the investments and awarding damages.
- The petitioners appealed to the SEC Commission en banc, which dismissed their appeal due to procedural flaws.
Court of Appeals Decision
- The Court