Cavite hospital caught by SEC illegally selling securities

The Securities and Exchange Commission (SEC) has put in more teeth again in dealing with fraud after issuing the seventh cease and desist order (CDO) it has executed in four months. This time, the recipient is a Cavite hospital illegally selling stocks for as much as

In a file obtained by the Business Bulletin, the country’s corporate regulatory watchdog has ordered Bacoor Doctors Medical Center, Inc. to cease and desist from offering for sale securities in the form of common shares of stock until the requisite registration statement is duly filed with and approved by the Commission.

Bacoor Doctos is a domestic stock corporation with an authorized capital stock of million and established to own, operate, manage and maintain hospitals, medical, and clinical laboratories.

The case of Bacoor Doctors stemmed from an email inquiry from someone whose name is Rodel Tolentino to the SEC. Tolentino alleged that he has invested in Bacoor Doctors but he was not able to get any return of his investment.

In his email to the Commission, he inquired if hospitals are allowed to solicit investments or sell stocks and as to how he can recover his investment with the said hospital.

This prompted the Enforcement and Investor Protection Department (EIPD) of the SEC to initiate an investigation against the company. EIPD then found an advertisement marketing an investment opportunity in Bacoor Doctors.

In a separate document obtained by Business Bulletin, Bacoor Doctors is apparently selling 'hospital stocks' or ownership for about per one block of shares, with special offering of

per month for 35 months until the investment reaches

Based on the records of SEC's Corporate Governance and Finance Department, Bacoor Doctors is not a registered issuer of securities nor does it have a pending application for a secondary license to offer or sell securities to the public.

In the section 8.1 of the Securities and Regulation Code (SRC), securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission.

“Bacoor Doctors is involved in offering and selling of its shares without the necessary license from the Commission which would operate as a fraud on investors or likely to cause grave or irreparable injury or prejudice to the investing public,” SEC said in its ruling.

“Thus, in the absence of a secondary license, Bacoor Doctors should be restrained from offering or selling its shares to the public. The strict regulation of securities is founded on the premise that the capital market depend on the investing public's level of confidence in the system,” it added.