Stock broker Johnny Yap was convicted after his company Solar Securities was discovered to have had 142 counts of buy and sell orders for BW which were “wash sale” transactions during June and October 1999.
JOHNNY Yap, former president, sales manager, and director of Solar Securities Inc, was sentenced to 14 years in jail and ordered to pay a P1-million fine by the Pasig Regional Trial Court.
The court convicted the local stock broker of illegal stock trading in relation to the BW Resources stock price manipulation scandal that occurred 22 years ago.
At the time, the manipulation led to a 1,462-percent surge in BW stock price, a loss-making gaming stock.
In a decision finalized on May 7, Pasig RTC Branch 67 found Mr. Yap guilty beyond reasonable doubt of violating Section 26 (a)(I)(1) of the Revised Securities Act, now Section 24.1(a)(I) of the Securities Regulation Code (SRC).
The Securities and Exchange Commission filed a criminal complaint against Mr. Yap after his company Solar Securities was discovered to have had 142 counts of buy and sell orders for BW which were “wash sale” transactions during June and October 1999.
Wash sales are considered transactions wherein the buyer and seller of the stock share a beneficial owner. In August 2000, a Special Operations Group formed by the SEC found that the company’s transactions were indeed wash sales.
This was because the brokerage was the buyer and seller in the 71 buy orders and 71 sell orders.
It was further confirmed after all offers and bids were made at very close intervals.
At first, BW shares were only 80 centavos each.
However, this increased significantly and by October, it reached a price of P12.50 each.
This was the same time Solar Securities executed the wash sale transactions.
This was peculiar because BW posted a P10.84 million loss in 1999 and had no corporate fundamentals. (MO)
Tags: #stockmarket, #JohnnyYap, #washsales