Baviera v. Standard Chartered Bank, Et Al.
Baviera v. Standard Chartered Bank, Et Al.
Baviera v. Standard Chartered Bank, Et Al.
Facts: SCB acted as a stock broker, soliciting Issue: Whether the SEC has jurisdiction over
from local residents foreign securities called the case.
GTPMF. These securities were not registered
Held: Yes. A criminal charge for violation of
with the SEC and were then remitted outwardly
the Securities Regulation Code is a specialized
to SCB-Hong Kong and SCB-Singapore. The
dispute. Hence, it must first be referred to an
Investment Capital Association of the administrative agency of special competence,
Philippines (ICAP) filed with the SEC a i.e., the SEC. Under the doctrine of primary
complaint alleging that SCB violated the jurisdiction, courts will not determine a
Revised Securities Act, particularly the controversy involving a question within the
provision prohibiting the selling of securities jurisdiction of the administrative tribunal, where
without prior registration with the SEC; and that the question demands the exercise of sound
its actions are potentially damaging to the local administrative discretion requiring the
mutual fund industry. Notwithstanding the BSP specialized knowledge and expertise of said
directive, SCB continued to offer and sell administrative tribunal to determine technical
GTPMF securities in this country. Petitioner and intricate matters of fact. The Securities
Regulation Code is a special law. Its
learned that the SCB had been prohibited by the
enforcement is particularly vested in the SEC.
BSP to sell GPTMF securities. Petitioner filed
Hence, all complaints for any violation of the
with the DOJ a complaint for violation of Code and its implementing rules and regulations
Section 8.1 of the Securities Regulation Code should be filed with the SEC. Where the
against private respondents but was denied complaint is criminal in nature, the SEC shall
holding that it should have been filed with the indorse the complaint to the DOJ for
SEC. preliminary investigation and prosecution.
CHARTERED BANK, PAUL SIMON
MORRIS, AJAY KANWAL, SRIDHAR
x-----------------------------x
Petitioner,
- versus -
* On leave.
2[2] Id., G.R. No. 170602, Vol. I, pp. 63-73. Written by
1[1] Rollo, G.R. No. 168380, Vol. I, pp. 48-62. Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate
Associate Justice Remedios A. Salazar-Fernando and Justice Portia Alio-Hormachuelos and Associate Justice
concurred in by Associate Justice Rosemarie D. Vicente Q. Roxas, concurring.
Carandang and Associate Justice Monina Arevalo-
Zenarosa.
The common factual antecedents of these cases as shown government agencies) of the Philippines
to non-residents. At the end of the second
by the records are:
year, the above ratio shall be 50%, which
ratio must be observed continuously
thereafter;
3[3] SEC.72. In addition to the operations specifically authorized elsewhere in this Act, The banks shall perform the services permitted under subsections (a), (b),
banking institutions other than building and loan associations may perform the and (c) of this section as depositaries or as agents. Accordingly they shall keep the
following services: funds, securities and other effects which they thus receive duly separated and apart
from the banks own assets and liabilities.
a) Receive in custody funds, documents and valuable objects, and rent safety
deposit boxes for the safeguarding of such effects; The Monetary Board may regulate the operations authorized by this
section in order to insure that said operations do not endanger the interest of the
depositors and other creditors of the banks.
b) Act as financial agent and buy and sell, by order of and for the account of their
customers, shares, evidences of indebtedness and all other types of securities;
c) Make collections and payments for the account of others and perform such
other services for their customers as are not incompatible with banking 4[4] Now repealed by The General Banking Law of 2000 (Republic Act No. 8791).
business;
d) Upon prior approval of the Monetary Board, act as managing agent, adviser, 5[5] Batas Pambansa Blg. 178. Now repealed by Republic
consultant or administrator of investment management advisory/consultancy Act No. 8799 (The Securities Regulation Code), which
accounts.
took effect on July 19. 2000.
registration with the SEC; and that its actions are potentially securities; and it has been acting merely as an agent or passive
damaging to the local mutual fund industry. order taker for them.
In its answer, SCB denied offering and selling securities, On September 2, 1997, the SEC issued a Cease and
contending that it has been performing a purely informational Desist Order against SCB, holding that its services violated
function without solicitations for any of its investment outlets Sections 4(a)7[7] and 198[8] of the
abroad; that it has a trust license and the services it renders under
the Custodianship Agreement for offshore investments are
authorized by Section 726[6] of the General Banking Act; that
its clients were the ones who took the initiative to invest in
9[9] Sec. 8. Requirement of Registration of Securities: Commission may prescribe, shall be made available to
each prospective purchaser.
12[12] Saavedra, Jr. v. Securities and Exchange Commission, citing Pambujan Sur United Mine Workers v. Samar
G.R. No. 80879, March 21, 1988, 159 SCRA 57, 62, Mining Co. Inc., 94 Phil. 932 (1954).
discretion can be ascribed to the DOJ in dismissing petitioners outrage against the very sovereignty of the State. It follows that
complaint. a representative of the State shall direct and control the
prosecution of the offense.13[13] This representative of the
State is the public prosecutor, whom this Court described in the
old case of Suarez v. Platon,14[14] as:
20[20] Glaxosmithkline Philippines, Inc. v. Malik and Ateeque, 21[21] Soria v. Desierto, G.R. Nos. 153524-25, January 31,
supra, p. 5, citing Cabaling v. People, 376 SCRA 113 2005, 450 SCRA 339. 345, citing Duero v. Court of
(2002). Appeals, 373 SCRA 11 (2002), Perez v. Office of the
Ombudsman, 429 SCRA 357 (2004).
Records show that public respondents examined On petitioners complaint for violation of the Securities
petitioners evidence with care, well aware of their duty to Regulation Code, suffice it to state that, as aptly declared by the
prevent material damage to his constitutional right to liberty and Court of Appeals, he should have filed it with the SEC, not the
fair play. In Suarez previously cited, this Court made it clear that DOJ. Again, there is no indication here that in dismissing
a public prosecutors duty is two-fold. On one hand, he is bound petitioners complaint, the DOJ acted capriciously or arbitrarily.
by his oath of office to prosecute persons where the
complainants evidence is ample and sufficient to show prima
facie guilt of a crime. Yet, on the other hand, he is likewise duty-
WHEREFORE, we DENY the petitions and AFFIRM
bound to protect innocent persons from groundless, false, or
the assailed Decisions of the Court of Appeals in CA-G.R. SP
malicious prosecution.22[22]
No. 87328 and in CA-G.R. SP No. 85078.
ANGELINA SANDOVAL-
GUTIERREZ
Associate Justice
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
CERTIFICATION
Chief Justice
Chairperson
(On leave)
Chief
Justice