The Philippine Securities and Exchange Commission (SEC) says it is preparing what it believes will be the first successful insider trading prosecution in its 58-year history.
Associate Commissioner Perfecto Yasay says Asia's oldest SEC, founded in 1936, is preparing a case involving minor oil firm Interport Resources Corp."I feel very strongly that a successful prosecution and conviction can be had," Mr. Yasay said in an interview last week.
He said a prosecution would provide tangible evidence of major changes within the SEC, which is widely regarded as steeped in corruption.
''We've never had any success- ful prosecution for insider trading or other deceitful practice," said Mr. Yasay, a former lawyer invit- ed by President Fidel Ramos's government to join the SEC 18 months ago.
SEC stories are commonplace in the investment community - of lavish gifts, trips abroad and bundles of profitable new share issues for its officials.
While not denying corruption exists, Mr. Yasay says nobody ever seems to want to back up these stories with hard evidence.
''We've heard lots of accusations. But I wish anyone who says that SEC officers are corrupt will have the courage to give us the evidence so that we will be able to prosecute," he said.
Some of the changes are designed to make the SEC more open.
The regulator currently has no formal mechanism for making its decisions public and holds most of its hearings behind closed doors. The SEC has extensive powers of its own to impose fines and to arbitrate in corporate disputes.
Mr. Yasay said information systems were being set up with the help of an $8 million U.S. grant and he hopes more SEC deliberations will be in public.
SEC procedures are also being revised so more decisions are delegated and the five commissioners are free to spend more time on policy matters.
This will also help reduce the risk of corruption as it will provide for more oversight within the SEC, he said.
Mr. Yasay concedes he has had differences of opinion with SEC Commissioner Rosario Lopez who, like the other senior officials, is a 20-year veteran of the agency.
But he rejects reports of a major rift. "We work together as a team," he said.
He also pays tribute to the Philippine Stock Exchange, which is currently waging its own campaign to stamp out rampant trading malpractices.
''We are committed to match what they have done," he said.
It was the PSE which initiated the probe into Interport after its share prices rose sharply just before it announced a tie-up with Malaysian interests.
Mr. Yasay said the Department of Justice had also been invited to join the Interport investigation to ensure that any prosecution had as good a chance as possible of succeeding.