G.R. No. 197032, 26 July 2017


A former employee of Price Richardson Corporation, Michelle S. Avelino, executed a sworn affidavit at the NBI’s Interpol Division, alleging that Price Richardson was engaged in boiler room operations, wherein the company sells non-existent stocks to investors using high pressure sales tactics. On The SEC filed before the DOJ its complaint against Price Richardson. The SEC alleged that Price Richardson was neither licensed nor registered to engage in the business of buying and selling securities within the Philippines or act as salesman, or an associated person of any broker or dealer. As shown by the seized documents and equipment, Price Richardson engaged in seeking clients for the buying and selling of securities, thereby violating Sections 26.3 and 28 of the Securities Regulation Code.

State Prosecutor Reyes issued a Resolution, dismissing the SEC’s Complaint for lack of probable cause. The SEC filed a petition for certiorari before the Court of Appeals. CA held that there was no grave abuse of discretion on the part of Secretary Gonzales when he affirmed State Prosecutor Reyes’ Resolutions, which found no probable cause to file an information. Hence, the present petition by the SEC.


Whether there is probable cause to indict respondents for violation of Sections 26.3 and 28 of the Securities Regulation Code.


A corporation’s personality is separate and distinct from its officers, directors, and shareholders. To be held criminally liable for the acts of a corporation, there must be a showing that its officers, directors, and shareholders actively participated in or had the power to prevent the wrongful act.

The evidence gathered by petitioner and the statement of respondent Price Richardson are facts sufficient enough to support a reasonable belief that respondent is probably guilty of the offense charged.

However, respondents Velarde-Albert and Resnick cannot be indicted for violations of the Securities Regulation Code and the Revised Penal Code.Petitioner failed to allege the specific acts of respondents Velarde-Albert and Resnick that could be interpreted as participation in the alleged violations. There was also no showing, based on the complaints, that they were deemed responsible for Price Richardson’s violations.

*Case digest by Teonilo M. Bagalanon Jr., JD – 4, Andres Bonifacio College, SY 2019 – 2020