MANILA – The Social Security System assured its members on Wednesday that the pension fund has institutionalized mechanisms to address administrative complaints against its employees and officials, amid revelations that certain executives had tapped the SSS stock brokers for their private benefit.
This, as a Makati lawmaker urged the NBI, the Ombudsman and the PSE’s primary and independent regulator of stockbrokers, to conduct parallel investigations.
“Such mechanisms ensure all parties are given due process,” the pension fund for workers in the private sector said in a statement.
“SSS guarantees its members that the Investment Reserve Fund, which came from members’ contributions and investment income, is intact and well-protected,” it added.
The statement was issued following reports that some of its officials are facing charges for allegedly using the agency’s accredited stock brokers for their own benefit.
Reports said SSS Commissioner Jose Gabriel La Vina has filed a complaint against SSS Executive vice president for investments Rizaldy Capulong, equities investment division chief Reginald Candelaria, equities product development head Ernesto Francisco Jr. and chief actuary George Ongkeko Jr.
La Vina alleged that the four are liable for “serious dishonesty and grave misconduct” since some of them used SSS-accredited stock brokers for their own benefit.
He said the previous SSS administration prevented possible abuses by its investment officers by requiring them to declare all their investments and have these approved by their superiors.
He claimed that Candelaria and Francisco endorsed each other’s stock holdings and these were approved by Capulong.
He added that these stocks were handled by SSS-accredited stockbrokers even if one of these brokers only handles high net worth investors and corporates.
Rep. Campos seeks NBI, Ombudsman, PSE probe
Meanwhile, Makati City Rep. Luis Campos Jr. urged the National Bureau of Investigation (NBI), the Office of the Ombudsman and the Capital Markets Integrity Corp. (CMIC) to investigate the alleged self-dealing by the four senior executives
“We are astounded at the manner in which the SSS’s second-highest ranking executive officer and three subordinates allegedly took advantage of their positions in transactions and acted for their own interests, rather than for the interests of the pension fund,” Campos, a deputy minority leader, said.
“They may have committed prohibited dealings under the Code of Conduct and Ethical Standards for Public Officials and Employees and the Ant-Graft and Corrupt Practices Act. This is why the NBI and the Ombudsman should get involved,” Campos said.
Campos urged the NBI to do “forensic accounting” on the private stock trades of the executives who are now facing an administrative complaint for “serious dishonesty and grave misconduct” before the Social Security Commission, the pension fund’s governing board.
There may have been several ways by which the executives conducted personal trades using information that was available only to them as managers of the SSS’s stock market investments, according to Campos.
“They may have been front-running and tailgating. It is possible they bought shares for their personal accounts at a lower price before they sent out large buy orders for the SSS’s portfolio. And then they may have sold their shares once prices were driven up by the buy orders for the pension fund’s account,” Campos said.
Under the law, Campos said public officials and employees are forbidden from having a financial or material interest in any transaction requiring the approval of their office, and from misusing for their private interests classified information known to them by reason of their office.
The complaint alleged that Candelaria and Francisco in particular used information they obtained from an accredited SSS broker to “profit” from the initial public offerings (IPOs) of five companies, instead of recommending them to the Social Security Commission.
Companies use IPOs to list at the Philippine Stock Exchange (PSE) for the first time so that their shares may be freely bought and sold in the open market.
“Nalaman nila ‘yan dahil yung stock broker ng SSS, every month nagbi-briefing yun sa amin kung ano magandang stock, ano magandang mga IPO na darating. So itong impormasyon na to na pwede silang kumita ng pera, nakuha nila dahil sa position nila,” SSS Commissioner Jose Gabriel La Viña earlier told ANC’s Early Edition.
Campos wants the CMIC to get involved because of allegations that the executives conducted personal trades using the same brokers accredited to buy and sell shares for the SSS’s account, and that the brokers may have known that the executives directing the pension fund’s trades were also trading for themselves.
Campos also urged the CMIC to find out whether the accredited brokers gave the SSS executives margin or loan accounts that may have enabled them to conduct large trades and rake in huge profits for themselves without putting up a lot of their own cash.
The CMIC is the PSE’s primary and independent regulator of stockbrokers, who are duty-bound to live up to the highest ethical standards.