QuestionsQuestions (SEC)
The rules aim for “just, speedy and inexpensive determination” of disputes and claims in SEC adjudicative functions, and must be liberally construed to promote public interest and assist parties in obtaining such determinations.
They are summary in nature and do not necessarily adhere to the technical rules of evidence in regular courts; however, the Rules of Court may apply suppletorily whenever practicable, subject to due process.
They are commenced and heard in the SEC main office, except that if the case involves a corporation whose principal office is within a region with an SEC extension office, it may be filed and heard in that extension office.
Only natural or juridical persons or entities authorized by law may be parties.
Actions must be prosecuted and defended in the name of the real party in interest. All persons with an interest in the subject and in obtaining the relief demanded shall be joined as complainants/petitioners; persons with an adverse interest, or those necessary to a complete determination/settlement, shall be joined as respondents.
A trustee of an express trust, guardian, executor/administrator, or a party authorized by statute may sue or be sued without joining the party for whose benefit the action is presented or defended; but the Hearing Officer may order the beneficiary to be made a party at any stage.
The stockholder must (1) be a stockholder at the time of the questioned transaction and at the time the action is filed, and remain a stockholder during pendency; and (2) allege with particularity the efforts made to obtain the action desired, or why such effort was not made.
No. It cannot be discontinued, compromised, or settled without the approval of the Hearing Officer; notice may also be ordered to stockholders if their interests will be substantially affected.
All pleadings must be verified by an affidavit that the affiant has read the pleading and that allegations are true and correct of the affiant’s own knowledge and belief. If based only on information and belief/knowledge and belief or lacks proper verification, it is treated as unsigned and not considered filed.
The principal party must certify under oath in the complaint/initiatory pleading or sworn annex that no action involving the same issues has been commenced elsewhere, disclose status if one is pending, and report new filings within five days. Failure causes dismissal without prejudice (not curable by mere amendment). False certification or non-compliance may constitute indirect contempt; willful and deliberate forum shopping may lead to summary dismissal with prejudice and direct contempt plus administrative sanctions.
Prohibited examples include: motion to dismiss the complaint; bill of particulars; motion for new trial or reconsideration or reopening; petition for relief from judgment; motion for extension of time; memoranda; motion to declare defendant in default; motion for postponement; supplemental pleadings; and motion for leave to amend pleadings.
The Hearing Officer must dismiss the complaint/petition if not sufficient in form and substance; otherwise, the corresponding summons is issued within five (5) days from filing.
It must state the names of the parties, direct the respondent to answer within the time fixed by the rules, and warn that failure to answer allows the plaintiff to take judgment by default and obtain the relief applied for as provided in Rule III, Sec. 10.
Personal service (including special rules for corporations) and substituted service are provided; service upon private foreign entities may be on resident agents/officers or government officials designated by law. Service by publication is allowed when the address is unknown or whereabouts cannot be ascertained by diligent inquiry; expenses are usually shouldered by the petitioner/complainant, with required notice by publication and mailing of copies in certain situations.
If the defendant fails to answer within the period, he is considered in default. The Hearing Officer proceeds to render judgment granting relief as warranted by the pleadings unless, in discretion, the Hearing Officer requires the plaintiff to submit evidence received ex parte.
Within ten (10) days after the last pleading is filed, the Hearing Officer sets a preliminary conference. It considers amicable settlement, simplification of issues, scheduling of hearings (continuous until completed), and other matters to aid just and speedy disposition. It must be terminated ten (10) days after commencement.