The Philippines’ securities regulator, the Securities and Exchange Commission, has announced that it will be launching an investigation into how an employee managed to steal more than $13.87m in client’s stocks.
The regulator will look at how the employee for R&L Investments, one of the country’s oldest brokerage firms that had been trading for 50 years, managed to steal so many stocks and forced it to close.
millions more could have potentially been stolen in a similar move
It will also examine whether other brokerage firms have been impacted. If so, millions more could have potentially been stolen in a similar move.
Confessed to a gambling habit
Named locally as Marlon Moron, the ex-employee stole $13.87m from the company over eight years, according to The Philippine Daily Inquirer.
He is currently in the custody of police and has confessed to a gambling habit that he blames for the initial theft in 2011 and all subsequent crimes.
The worker told police how he would siphon shares from R&L stocks inventory over into a private account. He would then sell them on and pocket the profits for himself.
confessed to a gambling habit that he blames for the initial theft in 2011 and all subsequent crimes
The owners of R&L have since filed a lawsuit against the man who they described as a long-time “trusted employee”. The company has since stressed that all of its client obligations would be met up and including to the date of October 31, which was when the crime was discovered.
Priority is to collaborate with clients affected
The owners, known as the Lee family, issued a short statement that said:
“At present, our priority is to dialogue and collaborate with the clients affected by Mr. Moron’s fraudulent activities, as well as to coordinate closely with the Philippine Stock Exchange and its regulatory organizations.”
Gambling in the Philippines an issue
Gambling in the Philippines has long been a contentious issue, but one that the regulator is now cracking down on.
Other popular gambling pastimes come from casinos, the lottery, and bingo. Although it is not known how Moron may have gambled the stolen cash.
R&L has said that they are undertaking “a comprehensive and rigorous investigation” which will look at how the employee was able to siphon off stocks without being found out by the company, its auditors, and other regulators.
A total of $13.87m in stocks was siphoned out of the company. The company has now permanently closed after operating for 50 years.