The Makati Regional Trial Court (RTC) has upheld the conviction of Calata Corporation’s top executives for market manipulation, affirming the legal liability of its officers for misleading disclosures under the Securities Regulation Code (SRC).
In a consolidated order, the Makati RTC Branch 148 denied the motion for reconsideration filed by Joseph H. Calata, chairman and CEO, and Jose Marie Fabella, corporate secretary and compliance officer, affirming their earlier conviction on two counts of violating Section 24(d) of the SRC.
The court’s 31 May 2025 ruling maintained the penalty of ₱4 million in fines each—or imprisonment in case of insolvency—against the executives, citing their role in making false and exaggerated claims in 2016 regarding a USD1.4 billion integrated resort project dubbed “Mactan Leisure City.” The announcement triggered a sharp spike in Calata’s stock trading by over 2,400 percent in a single day.
The ruling reaffirms the Securities and Exchange Commission’s (SEC) findings that the disclosures were materially misleading, especially given the absence of any formal permit application with the Philippine Amusement and Gaming Corp. (PAGCOR) at the time.
Crucially, the court clarified that the lack of actual investor loss or public harm is not required for a conviction under Section 24 of the SRC. It also rejected the defense’s argument that their actions merely constituted an administrative lapse under Section 17 of the law.
“The imposition of administrative sanctions does not preclude the filing of criminal charges,” the court stated, emphasizing the dual-track liability for corporate misrepresentation.
The case marks a significant win for securities enforcement in the Philippines, reinforcing the accountability of corporate officers for investor disclosures and bolstering investor protection in the capital markets.
