7/26/2019 Securities Regulation Code RA 8799.doc http://slidepdf.com/reader/full/securities-regulation-code-ra-8799doc 1/22 THE SECURITIES REGULATION CODE (RA 8799) I OVERVIEW: THE FINANCIAL MARKETS A. Capital Ma!"t# The places to go if you want to raise new money 1. Equity Capital – for the investor, the stock market provides a variale return a. !tock "arket – !ecurity – eg, shares of stock #. $et Capital – for the lender, the money or ond market provides a fi%ed return a. "oney "arket – for short term dets, ie, those normally maturing within 1 year from date of issuance – !ecurity – commercial paper &an unsecured '() of a company, issued on a discount asis, promising to pay the holder the full face value thereof upon redemption* . +ond "arket – for long term dets, ie, those normally maturing after a year from date of issuance !ecurity – unk onds &high yield onds havi ng high interest rates and are issued y lower credit rated companies or companies with no credit rating* +. N$%&Capital Ma!"t# The places to go if you want to hedge or mitigate the risks attached to holding capital assets 1. Commodity "arket – The instruments traded in this market are not present assets like shares of stock, commercial papers or onds ut future contracts calling for delivery of an asset - for this reason, a commodity market is usually referred to as a futures market. &eg, agricultural products, metals and financial instruments* !ecurity – a futures contract &one which entitles the holder to uy or sell a specific amount of the underlying commodity represented y the contract in a prearranged, deliverale grade at a specific date in the future at a specified price. #. o re ign E %ch an ge " ark et – Th is market is an over/the/counter market conducted y international anks and does not have a central location !ecurity – a forward e%change contract 0. (ptions "arket – 't enales an investor to purchase an option giving him the right to uy or sell a specific numer of shares at a future date, at a specific price. or this right, the investor either pays or receives money ut &ust like in a commodity market* the money involved is only a fraction of the market value of the shares concerned. !ecurity – call or put options II OVERVIEW OF THE LAW A. Stat" '$li The !tate shall estalish a socially conscious, free market that regulates itself, encourages the widest participation of ownership in enterprises, enhances the democratiation of wealth, promotes the development of the capital market, 23oryeth4+aldrias. *"a+5 26ayna4"alayang.+"p,t5 2$ionne4!anche.aa+#5 27am47aco.+"#i-%5 2+oie4!ta"aria. pi%ti%-5 2"iles "alaya.l"t,"#5 27apee4$e3eon. p$li.la/5 2Ascheia48umul."0.la/5 29aul4!orino:7udy4;ipol.i1.la/5 2<ya4;afael:"ac4"acapagal. i0.la/5 2=ivian4Tan:7ustin4"endoa. la2$.la/5 2"iguel4$e7esus.l"-al."t*i#5 23ianne4>ervasio.$00.la/5 2Ces4!icangco:;owena4;omero. ta3.la/5 163
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1. Equity Capital – for the investor, thestock market provides a varialereturn
a. !tock "arket –
!ecurity – eg, shares of stock
#. $et Capital – for the lender, themoney or ond market provides afi%ed return
a. "oney "arket – for short termdets, ie, those normally
maturing within 1 year fromdate of issuance –
!ecurity – commercial paper
&an unsecured '() of acompany, issued on a discountasis, promising to pay theholder the full face value
thereof upon redemption*
. +ond "arket – for long termdets, ie, those normally
maturing after a year from dateof issuance
!ecurity – unk onds &high
yield onds having highinterest rates and are issuedy lower credit ratedcompanies or companies with
no credit rating*
+. N$%&Capital Ma!"t#
The places to go if you want to hedge ormitigate the risks attached to holding
capital assets
1. Commodity "arket – The instrumentstraded in this market are not present
assets like shares of stock,commercial papers or onds utfuture contracts calling for delivery of
an asset - for this reason, acommodity market is usually referredto as a futures market. &eg,agricultural products, metals andfinancial instruments*
!ecurity – a futures contract &onewhich entitles the holder to uy orsell a specific amount of the
underlying commodityrepresented y the contract in aprearranged, deliverale grade ata specific date in the future at a
specified price.
#. oreign E%change "arket – Thismarket is an over/the/counter market
conducted y international anks anddoes not have a central location
!ecurity – a forward e%change
contract
0. (ptions "arket – 't enales aninvestor to purchase an option givinghim the right to uy or sell a specificnumer of shares at a future date, at
a specific price. or this right, theinvestor either pays or receivesmoney ut &ust like in a commodity
market* the money involved is only afraction of the market value of theshares concerned.
!ecurity – call or put options
II
OVERVIEW OF THE LAW
A. Stat" '$li
The !tate shall estalish a sociallyconscious, free market that regulates
itself, encourages the widest participationof ownership in enterprises, enhances thedemocratiation of wealth, promotes thedevelopment of the capital market,
protect investors, ensures full and fairdisclosure aout securities, minimies if
not totally eliminates insider trading andother fraudulent or manipulative devices
and practices which create distortions inthe free market.
+. '$/"# a%+ F,%ti$%# $4 t*" SEC
The shall have, among others, thefollowing powers and functions?1. <ave urisdiction and supervision
over all corporations, partnerships
or associations who are thegrantees of primary franchisesand:or a license or permit issued ythe >overnment-
#. ormulate policies andrecommendations on issuesconcerning the securities market,advise Congress and other
government agencies on all aspectsof the securities market
0. Approve, reect, suspend, revoke orrequire amendments to registration
statements, and registration andlicensing applications-
@. ;egulate, investigate or supervisethe activities of persons-
. !upervise, monitor, suspend or takeover the activities of e%changes,
clearing agencies and other !;(s-B. 'mpose sanctions for the violation of
laws, rules, regulations and orders-. 9repare, approve, amend or repeal
rules, regulations and orders-D. Enlist the aid and support of and:or
deputie any and all enforcement
agencies of the >overnment, as wellas any private institution,corporation, firm, association orperson-
. 'ssue cease and desist orders to
prevent fraud or inury-1F. 9unish for contempt of the
Commission, oth direct andindirect-
11. Compel the officers of anyregistered corporation or association
to call meetings of stockholders ormemers-
1#. 'ssue supoena duces tecum andsummon witnesses to appear,
search and seiure of all documents,papers, files and records, ta%returns, and ooks of accounts of any entity or person under
investigation-10. !uspend, or revoke the franchise or
certificate of registration of
corporations, partnerships orassociations-
1@. !uch other powers as may eprovided y law as well as those
which may e implied from, or whichare necessary or incidental.
The CommissionGs urisdiction over allcases enumerated under !ec of 9$ F#/
A is herey transferred to the Courts of general urisdiction or the appropriate;egional Trial Court.
The Commission shall retain urisdiction
over pending cases involving intra/corporate disputes sumitted for finalresolution which should e resolved within1 year from the enactment of this Code.
The Commission shall retain urisdictionover pending suspension of payments:rehailitation cases filed as of
0F 7une #FFF until finally disposed.
C. D"4i%iti$% $4 T"0#
1. S",iti"# & are shares, participation
or interests in a corporation or in acommercial enterprise or profit/
making venture and evidenced y acertificate, contract, instrument,
whether written or electronic incharacter. 't includes?
&a* !hares of stock, onds,
deentures, notes, evidences of indetedness, asset/ackedsecurities-
&* 'nvestment contracts, certificatesof interest or participation in aprofit sharing agreement,certificates of deposit for a futuresuscription-
&c* ractional undivided interests inoil, gas or other mineral rights-
&d* $erivatives like option andwarrants-
&e* Certificates of assignments,certificates of participation, trust
certificates, voting trustcertificates or similar instruments-
&f* 9roprietary or non proprietarymemership certificates
incorporations- and&g* (ther instruments as may in the
future e determined y theCommission.
#. I##," & the originator, maker,oligor, or creator of the security.
rules promulgated pursuantthereto, or any order of the
Commission in connectionwith the offering for which aregistration statement has
een filed-o <as een or is engaged or is
aout to engage infraudulent transactions-
o <as made any false or
misleading representation of material facts in anyprospectus-
o <as failed to comply with
any requirement that the
Commission may impose asa condition for registration
• The registration statement is on
its face incomplete or inaccurate
in any material respect orincludes any untrue statement of a material fact or omits to statea material fact required to e
stated therein or necessary tomake the statements therein notmisleading- or
• The issuer, any officer, director
or controlling person of the
issuer, or person performingsimilar functions, or anyunderwriter has een convicted,y a competent udicial or
administrative ody, upon plea of
guilty, or otherwise, of an offenseinvolving moral turpitude and:orfraud or is enoined or restrained
y the Commission or othercompetent udicial oradministrative ody for violationsof securities, commodities, and
other related laws.
• 'f any issuer shall refuse to
permit an e%amination to emade y the Commission, itsrefusal shall e ground for the
refusal or revocation of theregistration of its securities.
. Oat* $4 I##,"
)pon effectivity of the registrationstatement, the issuer shall state
under oath in every prospectus thatall registration requirements have
een met and that all information aretrue and correct as represented y
the issuer or the one making thestatement.
Any untrue statement of fact oromission to state a material factrequired to e stated or necessary tomake the statement therein notmisleading shall constitute fraud.
E. S,#p"%#i$% $4 O44" a%+ Sal"
• 'f the Commission deems it necessary,
it may issue an order suspending theoffer and sale of the securitiespending any investigation.
• 'f, at any time, the Commission finds
that a registration statement contains
any false statement or omits to stateany fact required to e stated therein
or necessary to make the statementstherein not misleading, the
Commission may conduct ane%amination, and, after due noticeand hearing, issue an (rdersuspending the effectivity of the
registration statement.
• ailure of the issuer, underwriter, or
any other person to cooperate, or his
ostruction or refusal to undergo ane%amination, shall e a ground for the
issuance of a suspension order.
• 'f, at any time, the information
contained in the registration
statement filed is or has ecomemisleading, incorrect, inadequate or
incomplete in any material respect, orthe sale or offering for sale of the
security registered thereunder maywork or tend to work a fraud, the
Commission may require from theissuer such further information
necessary to enale the Commissionto ascertain whether the registration
of such security should e revoked.The Commission may also suspendthe right to sell and offer for sale such
security pending further investigation.• The refusal to furnish information
required y the Commission may e aground for the issuance of an order of
)pon the issuance of the suspensionorder, no further offer or sale of such
security shall e made until the same islifted or set aside y the Commission.(therwise, such sale shall e void.
6otice of issuance of such order shall egiven to the issuer and every dealer androker who shall have notified theCommission of an intention to sell such
security.
. E3"0pt S",iti"# a%+ Ta%#ati$%#
1. E3"0pt S",iti"#
&a* Any security issued or
guaranteed y the >overnmentof the 9hilippines, or y any
political sudivision or agencythereof, or y any person acting
as an instrumentality of said>overnment.
&* Any security issued orguaranteed y the government
of any country with which the9hilippines maintains diplomatic
relations, or y any state,province or political sudivisionthereof on the asis of reciprocity.
&c* Certificates issued y a receiveror y a trustee in ankruptcyduly approved y the proper
adudicatory ody.&d* Any security or its derivatives
the sale or transfer of which isunder the supervision andregulation of the (ffice of the
'nsurance Commission, <ousingand 3and )se ;egulatory +oard,or the +ureau of 'nternal;evenue.
&e* Any security issued y a anke%cept its own shares of stock.
#. E3"0pt Ta%#ati$%# 6
&a* At any udicial sale, or sale y
an e%ecutor, administrator,guardian or receiver or trusteein insolvency or ankruptcy.
&* +y or for the account of a
pledge holder, or mortgagee orsimilar lien holder selling in theordinary course of usiness and
not for the purpose of avoidingthe provisions of this Code, to
liquidate a ona fide det, asecurity pledged in good faith as
security for such det.&c* An isolated transaction in which
the sale or offer for sale,suscription or delivery is noteing made in the course of
repeated and successivetransactions y the owner or hisrepresentative and such owner orrepresentative not eing theunderwriter of such security.
&d* The distriution y a corporationto its stockholders or othersecurity holders as a stockdividend or other distriution out
of surplus.&e* The sale of capital stock of a
corporation to its ownstockholders e%clusively, where
no commission or otherremuneration is paid or given
directly or indirectly.&f* The issuance of onds or notes
secured y mortgage upon realestate or tangile personal
property, where the entiremortgage together with all the
onds or notes secured thereyare sold to a single purchaser at a
single sale.&g* The issue and delivery of any
security in e%change for any othersecurity of the same issuer
pursuant to a right of conversion?9rovided, That the securitysurrendered has een registered
under this Code or was e%empt,and that the security delivered ine%change, if sold at theconversion price, would at thetime of such conversion fall within
the class of securities entitled toregistration under this Code.)pon such conversion the parvalue of the security surrendered
in such e%change shall e deemedthe price at which the securities
issued and delivered in suche%change are sold.
&h* +rokerGs transactions, e%ecutedupon customerGs orders, on any
registered E%change or othertrading market.
&i* !uscriptions for shares of thecapital stock of a corporation prior
to incorporation or in pursuanceof an increase in its authoriedcapital stock, when no e%pense is
shall file, at the time either suchrequirement is first satisfied or within tendays after he ecomes such a eneficial
owner, director, or officer, a statementwith the Commission and, if such securityis listed for trading on an E%change, alsowith the E%change, of the amount of allequity securities of such issuer of which
he is the eneficial owner, and within ten&1F* days after the close of each calendar
induce such a purchase orsale through manipulativedevices such as marking theclose, painting the tape,
squeeing the float, hypeand dump, oiler roomoperations and such othersimilar devices.
&c* To circulate or disseminateinformation that the price of anysecurity listed in an E%change
will or is likely to rise or fallecause of manipulative market
operations of any one or morepersons conducted for the
purpose of raising or depressingthe price of the security for the
purpose of inducing thepurchase or sale of suchsecurity.
&d* To make false or misleading
statement with respect to anymaterial fact, which he knew orhad reasonale ground to
elieve was so false ormisleading, for the purpose of inducing the purchase or sale of any security listed or traded in
an E%change.
&e* To effect any series of transactions for the purchase
and:or sale of any securitytraded in an E%change for the
purpose of pegging, fi%ing orstailiing the price of such
security, unless otherwiseallowed y this Code or y rules
of the Commission.
#. I%#i+" Ta+i%-
'ati"# $1""+ :
• 'nsider
• insiderGs spouse or relatives y
affinity or consanguinity withinthe second degree, legitimate orcommon/law,
't shall e unlawful for an insider tosell or uy a security of the issuer,
while in possession of materialinformation with respect to the
issuer or the security that is notgenerally availale to the pulic,
unless?
&a* The insider proves that theinformation was not gained from
such relationship- or&* 'f the other party selling to or
uying from the insider &or hisagent* is identified, the insider
proves?
• that he disclosed the
information to the other party,
or• that he had reason to elieve
that the other party otherwiseis also in possession of theinformation.
A purchase or sale of a security of theissuer shall e presumed to have eeneffected while in possession of
material non/pulic information if transacted after such informationcame into e%istence ut prior todissemination of such information to
the pulic and the lapse of areasonale time for the market to
asor such information
This presumption shall e reuttedupon a showing y the purchaser or
seller that he was not aware of thematerial non/pulic information at thetime of the purchase or sale.
Mat"ial %$%&p,2li i%4$0ati$%:'t has not een generally disclosed tothe pulic and would likely affect the
market price of the security aftereing disseminated to the pulic andthe lapse of a reasonale time for the
market to asor the information- orwould e considered y a reasonaleperson important under thecircumstances in determining hiscourse of action whether to uy, sell
or hold a security.
't shall e unlawful for any insider tocommunicate material non/pulic
information aout the issuer or thesecurity to any person who, y virtue
of the communication, ecomes aninsider, where the insidercommunicating the information knowsor has reason to elieve that such
person will likely uy or sell a securityof the issuer while in possession of such information.
the Commission determines theapplicant or registrant?
&a* <as willfully violated any
provision of this Code, anyrule, regulation or ordermade hereunder, or anyother law administered y
the Commission, or in thecase of a registered roker,
dealer or associated personhas failed to supervise, with
a view to preventing suchviolation, another person
who commits such violation-&* <as willfully made or caused
to e made a materiallyfalse or misleading
statement in any applicationfor registration or reportfiled with the Commission ora self/regulatory
organiation, or has willfullyomitted to state anymaterial fact that is
required to e statedtherein-
&c* <as failed to satisfy thequalifications orrequirements for
registration-&d* <as een convicted of an
offense involving moralturpitude, fraud,
emelement,counterfeiting, theft, estafa,
misappropriation, forgery,riery, false oath, or
perury, or of a violation of securities, commodities,
anking, real estate orinsurance laws-
&e* 's enoined or restrained y acompetent udicial or
administrative ody fromengaging in securities,commodities, anking, real
estate or insurance activitiesor from willfully violating laws
governing such activities-&f* 's suect to an order of a
competent udicial oradministrative ody refusing,
revoking or suspending anyregistration, license or otherpermit under this Code, the
rules and regulationspromulgated thereunder, anyother law administered y theCommission-
&g* 's suect to an order of a self/
regulatory organiationsuspending or e%pelling himfrom memership orparticipation
&h* <as een found to have willfullyviolated any provisions of securities, commodities,anking, real estate or
insurance laws, or haswillfully aided, aetted,
counseled, commanded,induced or procured such
violation- or&i* <as een udicially declared
insolvent.
#.@. 't shall e sufficient cause forrefusal, revocation or suspension of a
rokerKs or dealerGs registration, if anyassociated person thereof or any uridicalentity controlled y such associatedperson has committed any act or omission
or is suect to any disaility enumeratedearlier.
3. R"-,lati$% $4 E3*a%-"#
1. Nat," $4 St$! E3*a%-"#
Sec Opinion #11 (2!"
't is important to stress that the!ecurities ;egulation Code &!;C*
treats e%changes as a special specieof corporation and suects them to
rules not otherwise applicale toregular corporations.
The stock e%change performs a
function vital to the national economy,a function vested with pulic interest.'t is said that the economy moves onthe asis of the rise and fall of the
stocks traded and thus, the integrityof the e%change overseeing thesetransactions can never e over
emphasied. 't is for this reasonthat the !;C provides for stricter
rules on e%change regulation. The!;C devotes a whole chapter on
e%changes and other securitiestrading markets, and it is replete
with provisions designed toprofessionalie the e%change,encourage greater pulic
participation, ensure increasedtransparency, greater responsiilityand improve corporate governance.These provisions are not found inthe Corporation Code and are meant
as additional legal requirementsapplicale only to e%changes.
't is thus incorrect to argue that the
provisions of the Corporation Codealone govern the operation of e%changes. Hhile the CorporationCode applies to corporations in
general, the !;C is a special lawthat primarily governs the regulation
of e%changes. As etween a specificstatute and a general statute, the
former must prevail since it evincesthe legislative intent more clearly
than a general statute does.
Thus the !EC has the power of supervision over e%changes.
!upervision entails overseeing orthe power or authority to see thatsuordinate suect performs itsduties. 'f the latter fails or neglects
to fulfill them the former may takesuch action or step as prescried ylaw to make them perform its
duties. 'n this specific instance, the!EC can even take over themanagement of the e%change asauthoried y the !;C.
#. R"-i#tati$% '$"+,"
Any E%change may e registered as
such with the Commission y filingan application for registration in
such form and containing suchinformation and supporting
documents as the Commission yrule shall prescrie, including the
following?
&a* An undertaking to comply andenforce compliance y its
memers with the provisionsof this Code, its implementing
rules or regulations and therules of the E%change-
&* The organiational charts of theE%change, rules of procedure,
and a list of its officers andmemers-
&c* Copies of the rules of theE%change- and
&d* An undertaking that in the event
a memer firm ecomesinsolvent or when the E%changeshall have found that thefinancial condition of itsmemer firm has so
deteriorated that it cannotreadily meet the demands of itscustomers for the delivery of securities and:or payment of
sales proceeds, the E%changeshall take over the operation of the insolvent memer firm andimmediately proceed to settle
the memer firmGs liailities toits customers.
;egistration of an E%change shall e
granted upon compliance with thefollowing provisions?
&a* That the applicant is organied as
a stock corporation-&* That the applicant is engaged
solely in the usiness of operating an e%change?9rovided, however, That theCommission may e%empting an
E%change organied as a stockcorporation and owned andcontrolled y another uridical
person from this restriction-&c* Hhere the E%change is organied
as a stock corporation, that noperson may eneficially own orcontrol, directly or indirectly,
more than I of the votingrights of the E%change and noindustry or usiness group mayeneficially own or control more
than #FI of the voting rights of the E%change? 9rovided,
however, That the Commissionmay adopt rules, regulations or
issue an order, uponapplication, e%empting an
applicant from this prohiitionwhere it finds that suchownership or control will notnegatively impact on the
e%changeGs aility to effectivelyoperate in the pulic interest-
!usection &c* mandates that theownership of the stocks of the e%changee roadened and democratied,
therey ensuring greater pulicparticipation.
(n the other hand, !usections &f* and&g* mandate a oard composition whereno more than @I of the seats shall eoccupied y rokers, and no less than1I to e comprised of &0* independent
directors and persons representing othersectors of the market. Hith respect to
independent directors, their election inthe +oard is intended to ensure that the
+oard will faithfully discharge itsfiduciary responsiilities to its
stockholders.
These provisions aim for a morerepresentative, democratic, independent
+oard of $irectors that is autonomousfrom the control of any sector of themarket.
". I%+"p"%+"%t Di"t$#
Any corporation with
• a class of equity securities listed for
trading on an E%change or
• with assets in e%cess of
9F,FFF,FFF.FF and having #FF ormore holders, at least of #FF of which
are holding at least 1FF shares of aclass of its equity securities or whichhas sold a class of equity securities tothe pulic pursuant to an effective
registration statement
!hall have at least # independentdirectors or such independent directors
shall constitute at least #FI of thememers of such oard, whichever is the
lesser.
An Mindependent directorN shall mean aperson other than an officer or employee
of the corporation, its parent orsusidiaries, or any other individualhaving a relationship with the corporation,which would interfere with the e%ercise of
independent udgment in carrying out theresponsiilities of a director.
6. S"l4&R"-,lat$ O-a%iBati$%#
1. S$p" D"4i%iti$%
The Commission shall have the power
to register as a self/regulatoryorganiation organiations whoseoperations are related to or connected
with the securities market such as utnot limited to
• associations of rokers and
dealers,
• transfer agents,
• custodians,
• fiscal and paying agents,
• computer services,
• news disseminating services,
• pro%y solicitors,
•
statistical agencies,• securities rating agencies, and
eing investigated and:or chargedmay propose in writing an offer of
settlement with the Commission.
The Commission may consider theoffer ased on timing, the nature of
the investigation or proceeding, andthe pulic interest.
The Commission may only agree toa settlement offer ased on itsfindings that such settlement is inthe pulic interest. Any agreementto settle shall have no legal effect
until pulicly disclosed. !uchdecision may e made without adetermination of guilt on the part of the person making the offer.
O. Ci1il Lia2iliti"#
1. O% A$,%t $4 Fal#" R"-i#tati$%
Stat"0"%t
Who ay sue$
Any person
• acquiring a security, the
registration statement of which
or any part thereof contains onits effectivity an untruestatement of a material fact oromits to state a material fact
required to e stated therein ornecessary to make such
statements not misleading, and
• who suffers damage
'f the person who acquired thesecurity did so after the issuer hasmade generally availale to itssecurity holders an income
statement covering a period of atleast 1# months, then the right of
recovery shall e conditioned onproof that such person acquired the
security relying upon such untruestatement.
Who ay %e sued$ &a* The issuer and every person
who signed the registrationstatement-
&* Every person who was a directoror a partner in the issuer at
the time of the filing of theregistration statement or any
part, supplement oramendment thereof-
&c* Every person who is named in theregistration statement as eing
or aout to ecome a directoror a partner-
&d* Every auditor or auditing firmnamed as having certified anyfinancial statements used in
connection with the registrationstatement or prospectus.&e* Every person who, with his
written consent has eennamed as having prepared or
certified any part of theregistration statement, or ashaving prepared or certified anyreport or valuation which is
used in connection with theregistration statement.
&f* Every selling shareholder whocontriuted to and certified as
to the accuracy of a portion of the registration statement.
&g* Every underwriter with respect tosuch security.
'$##i2l" D"4"%#" :
!uch person may allege that at the
time of such acquisition he knew of nosuch untrue statement or omission?
#. O% A$,%t $4 I%#i+" Ta+i%-
W*$ 0a 2" #,"+
Any insider who violates !usection
#.1 and any person in the case of atender offer who violates !usection#.@ &a*&i*, or any rule or regulationthereunder, y purchasing or selling asecurity while in possession of
material information not generallyavailale to the pulic, shall e lialein a suit rought y any investor who,contemporaneously with the purchase
or sale of securities that is the suectof the violation, purchased or sold
securities of the same class unlesssuch insider, or such person in the
case of a tender offer, proves thatsuch investor knew the information or
would have purchased or sold at thesame price regardless of disclosure of the information to him.An insider who communicates
material non/pulic information, shalle ointly and severally liale with and
to the same e%tent as, the insider,or person in the case of a tender
offer.
;. Li0itati$% $4 Ati$%#
6o action shall e maintained to enforceany liaility created under !ection B
&false registration statement* or &false prospectus. Communications,reports* unless rought within # yearsafter the +i#$1" of the untruestatement or the omission.
'f the action is to enforce a liailitycreated under !usection .1&a*®istration of securities*, unless
rought within # years after the1i$lati$% upon which it is ased.
'n no event shall any such action e
rought to enforce a liaility createdunder !ection B or !usection .1 &a*
more than years after the security wasona fide $44""+ t$ t*" p,2li, or
under !usection .1 &* &sale asedon false prospectus, communications,
reports* more than years after the#al".
6o action shall e maintained to enforce
any liaility created under any otherprovision of this Code unless rought?
• within # years after the
+i#$1" of the facts
constituting the cause of actionand
• within years after sucha,#" $4 ati$% a,"+
!. Da0a-"# t$ 2" A/a+"+
1. A0$,%t# Ki%+# $4 Da0a-"#
All suits to recover damages
pursuant to !ections B &falseregistration statement*, &false
prospectus, communications,reports*, D &fraud in connectionwith securities transactions*, &manipulation of prices*, BF
&commodity futures contracts andpre/need plans* and B1 &insidertrading* shall e rought efore the;TC, which shall have e%clusive
urisdiction to hear and decide suchsuits.
The Court is herey authoried toaward damages in an amount not
e%ceeding triple the amount of thetransaction plus actual damages.
E%emplary damages may also e
awarded in cases of ad faith, fraud,malevolence or wantonness in theviolation of this Code.
The Court is also authoried to awardattorneyGs fees not e%ceeding 0FI of the award.
#. '"#$%# lia2l" t$ pa
All persons, including the issuer, heldliale under the provisions of !ectionsB, , D, , BF and B1 shallcontriute equally to the total liaility
adudged herein.
'n no case shall the principalstockholders, directors and other
officers, recover their contriution tothe liaility from the issuer. <owever,
the right of the issuer to recover fromthe guilty parties the amount it has
contriuted shall not e preudiced.
T. N$%&/ai1" $4 '$1i#i$%#
Any condition, stipulation, provision
inding any person to waive compliancewith any provision of this Code or of anyrule of an E%change as well as the waiver
itself, shal e void.
). '"%alti"#
Any person who violates any of theprovisions of this Code or any person who,in a registration statement makes anyuntrue statement of a material fact or
omits to state any material fact requiredto e stated therein or necessary to make
the statements therein not misleading,shall, upon conviction, suffer
• a fine of not less than 9F,FFF.FF
nor more than 9,FFF,FFF.FF or
• imprisonment of not less than
years nor more than #1 years, or
• oth in the discretion of the court.
'f the offender is a corporation,partnership or association or other