A.

ADMINISTRATIVE SANCTIONS1

After due notice and hearing, the Commission finds that:

(a) There is a violation of this Code, its rule, or its orders;

(b) Any registered broker or dealer, associated person thereof has failed reasonably to
supervise, with a view to preventing violations, another person subject to supervision who
commits any such violation;

(c) Any registrant or other person has, in a registration statement or in other reports,
applications, accounts, records or documents required by law or rules to be filed with the
Commission, made any untrue statement of a material fact, or omitted to state any
material fact required to be stated their or necessary to make the statements therein not
misleading; or, in the case of an underwriter, has failed to conduct an inquiry with
reasonable diligence to insure that a registration statement is accurate and complete in
all material respects; or

(d) Any person has refused to permit any lawful examinations into its affairs

Shall, in its discretion, and subject only to the limitations hereinafter prescribed, impose
any or all of the following sanctions as may be appropriate in light of the facts and
circumstances:

(i) Suspension, or revocation of any registration for the offering of securities;

(ii) A fine of no less than Ten thousand pesos (P10,000.00) nor more than One
million pesos (P1,000,000.00) plus not more than Two thousand pesos
(P2,000.00) for each day of continuing violation;

(iii) In the case of a violation of Sections 19.2, 20, 24, 26 and 27, disqualification
from being an officer, member of the Board of Directors, or person performing
similar functions, of an issuer required to file reports under Section 17 of this Code
or any other act, rule or regulation administered by the Commission;

(iv) In the case of a violation of Section 34, a fine of no more than three (3) times
the profit gained or loss avoided as result of the purchase, sale or communication
proscribed by such Section, and

(v) Other penalties within the power of the Commission to impose.

The imposition of the foregoing administrative sanctions shall be without prejudice to the
filing of criminal charges against the individuals responsible for the violation.

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Section 54, SRC
The Commission has the power to issue writs of execution to enforce the provisions of
the Section and to enforce payment of the fees and other dues collectible under the SRC.

B. AMOUNT AND KINDS OF DAMAGES2

All suits to recover damages pursuant to Sections 56, 57, 58, 59, 60 and 61 shall be
brought before the Regional Trial Court, which shall have exclusive jurisdiction to hear
and decide such suits. The Court is authorized to award damages in an amount not
exceeding triple the amount of the transaction plus actual damages.
Exemplary damages may also be awarded in cases of bad faith, fraud, malevolence or
wantonness in the violation of the SRC or the rules and regulations promulgated
thereunder.
The Court is also authorized to award attorney’s fees not exceeding
thirty percentum (30%) of the award.
C. SOLIDARY LIABILITY
The persons specified in Sections 56, 57, 58, 59, 60 and 61 hereof shall be jointly and
severally liable for the payment of damages. However, any person who becomes liable
for the payment of such damages may recover contribution from any other person who,
if sued separately, would have been liable to make the same payment, unless the former
was guilty of fraudulent representation and the latter was not.3
Notwithstanding any provision of law to the contrary, all persons, including the issuer,
held liable under the provisions of Sections 56, 57, 58, 59, 60 and 61 shall contribute
equally to the total liability adjudged herein. In no case shall the principal stockholders,
directors and other officers of the issuer or persons occupying similar positions therein,
recover their contribution to the liability from the issuer. However, the right of the issuer
to recover from the guilty parties the amount it has contributed under this Section shall
not be prejudiced.4
D. LIMITATION OF ACTIONS

No action shall be maintained to enforce any liability created under Section 56 or 57 of

this Code unless brought within two (2) years after the discovery of the untrue statement
or the omission, or, if the action is to enforce a liability created under Subsection 57.1 (a),
unless, brought within two (2) yeas after the violation upon which it is based. In no event
shall an such action be brought to enforce a liability created under Section 56 or
Subsection 57.1 (a) more than five (5) years after the security was bona fide offered to
the public, or under Subsection 57.1 (b0 more than five (5) years after the sale.5

2
Sec 63, SRC
3
Sec 63. 2, SRC
4
Sec 63. 3, SRC
5
Sec 62, SRC
62.2. No action shall be maintained to enforce any liability created under any other
provision of this Code unless brought within two (20 years after the discovery of the facts
constituting the cause of action and within five (5) years after such cause of action
accrued.

1. Civil Liabilities on Account of False Registration Statement6.

Any person acquiring a security, the registration statement of which or any part thereof
contains on its effectivity an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make such statements not
misleading, and who suffers damage, may sue and recover damages from the
following enumerated persons, unless it is proved that at the time of such acquisition
he knew of such untrue statement or omission:

(a) The issuer and every person who signed the registration statement:

(b) Every person who was a director of, or any other person performing similar
functions, or a partner in, the issuer at the time of the filing of the registration
statement or any part, supplement or amendment thereof with respect to which his
liability is asserted;

(c) Every person who is named in the registration statement as being or about to
become a director of, or a person performing similar functions, or a partner in, the
issuer and whose written consent thereto is filed with the registration statement;

(d) Every auditor or auditing firm named as having certified any financial
statements used in connection with the registration statement or prospectus.

(e) Every person who, with his written consent, which shall be filed with the
registration statement, has been named as having prepared or certified any part
of the registration statement, or as having prepared or certified any report or
valuation which is used in connection with the registration statement, with respect
to the statement, report, or valuation, which purports to have been prepared or
certified by him.

(f) Every selling shareholder who contributed to and certified as to the accuracy of
a portion of the registration statement, with respect to that portion of the registration
statement which purports to have been contributed by him.

(g) Every underwriter with respect to such security.

If the person who acquired the security did so after the issuer has made generally
available to its security holders an income statement covering a period of at least twelve
(12) months beginning from the effective date of the registration statement, then the right

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Sec 56, SRC
of recovery under this subsection shall be conditioned on proof that such person acquired
the security relying upon such untrue statement in the registration statement or relying
upon the registration statement and not knowing of such income statement, but such
reliance may be established without proof of the reading of the registration statement by
such person.

2. Civil Liabilities Arising in Connection With Prospectus, Communications and

Reports7. Any person who:

(a) Offers to sell or sells a security in violation of Chapter III, or

(b) Offers to sell or sells a security, whether or not exempted by the provisions of
this Code, by the use of any means or instruments of transportation or
communication, by means of a prospectus or other written or oral communication,
which includes an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading (the purchaser not knowing of such
untruth or omission), and who shall fail in the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of such untruth or
omission, shall be liable to the person purchasing such security from him, who may
sue to recover the consideration paid for such security with interest thereon, less
the amount of any income received thereon, upon the tender of such security, or
for damages if he no longer owns the security.

Any person who shall make or cause to be made any statement in any report, or
document filed pursuant to this Code or any rule or regulation thereunder, which
statement as at the time and in the light of the circumstances under which it was made
false or misleading with respect to any material fact, shall be liable to any person who,
not knowing that such statement was false or misleading, and relying upon such
statement shall have purchased or sold a security at a price which was affected by such
statement, for damages caused by such reliance, unless the person sued shall prove that
he acted in good faith and had no knowledge that such statement was false or misleading.

3. Civil Liability of Fraud in Connection with Securities Transactions8

Any person who engages in any act or transaction in violation of Sections 19.2, 20 or 26,
or any rule or regulation of the Commission thereunder, shall be liable to any other person
who purchases or sells any security, grants or refuses to grant any proxy, consent or
authorization, or accepts or declines an invitation for tender of a security, as the case may
be, for the damages sustained by such other person as a result of such act or transaction.

4. Civil Liability for Manipulation of Security Prices9

7
Sec. 57, SRC
8
Sec. 58, SRC
9
Sec. 59, SRC
 Any person who willfully participates in any act or transaction in violation of Section
24 shall be liable to any person who shall purchase or sell any security at a price which
was affected by such act or transaction, and the person so injured may sue to recover
the damages sustained as a result of such act or transaction.

5. Civil Liability with Respect to Commodity Futures Contracts and Pre-need Plans10

Any person who engages in any act or transactions in willful violation of any rule or
regulation promulgated by the Commission under Section 11 or 16, which the
Commission denominates at the time of issuance as intended to prohibit fraud in the
offer and sale of pre-need plans or to prohibit fraud, manipulation, fictitious
transactions, undue speculation, or other unfair or abusive practices with respect to
commodity future contracts, shall be liable to any other person sustaining damages
as a result of such act or transaction.

As to each such rule or regulation so denominated, the Commission by rule shall

prescribe the elements of proof required for recovery and any limitations on the amount
of damages that may be imposed.

6. Civil Liability on Account of Insider Trading11.

Any insider who violates Subsection 27.1 and any person in the case of a tender offer
who violates Subsection 27.4 (a)(I), or any rule or regulation thereunder, by purchasing
or selling a security while in possession of material information not generally available to
the public, shall be liable in a suit brought by any investor who, contemporaneously with
the purchase or sale of securities that is the subject of the violation, purchased or sold
securities of the same class unless such insider, or such person in the case of a tender
offer, proves that such investor knew the information or would have purchased or sold at
the same price regardless of disclosure of the information to him.

An insider who violates Subsection 27.3 or any person in the case of a tender offer who
violates Subsection 27.4 (a), or any rule or regulation thereunder, by communicating
material nonpublic information, shall be jointly and severally liable under Subsection 61.1
with, and to the same extent as, the insider, or person in the case of a tender offer, to
whom the communication was directed and who is liable under Subsection 61.1 by reason
of his purchase or sale of a security.

D. CRIMINAL LIABILITIES
E. SETTLEMENT OFFERS12/ NOLO CONTENDERE or CONSENT DECREE

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Sec. 60, SRC
11
Sec. 61, SRC
12
Sec. 55, SRC
At any time, during an investigation or proceeding under this Code, parties being
investigated and/or charged may propose in writing an offer of settlement with the
Commission.

Upon receipt of such offer of settlement, the Commission may consider the offer based
on timing, the nature of the investigation or proceeding, and the public interest.

The Commission may only agree to a settlement offer based on its findings that such
settlement is in the public interest. Any agreement to settle shall have no legal effect until
publicly disclosed. Such decision may be made without a determination of guilt on the
part of the person making the offer.

The Commission shall adopt rules and procedures governing the filing, review,
withdrawal, form of rejection and acceptance of such offers.