Have you heard of the R&L Investments fiasco?
If not, let me tell you a little bit about it and what I think about the issue…
R&L Investment, Inc. made its exit from the stock exchange, not gracefully though, but through a revocation of license slapped by the Securities and Exchange Commission (SEC) last June 11. The 50-year-old brokerage firm lost P700 million worth of client shares resulting to the deterioration of the company’s financial condition, consequently the delivery of securities and payment of sales proceeds were not met.
Ms. Lucy Linda Lee, R&L treasurer, reported the incident in October 2019 accusing Mr. Marlo Moron, settlement clerk and long-term employee of the company, of committing the offense. Mr. Moron admitted to his crime and is now languishing in jail.
But something is amiss here. How can a clerk trade on the floor?
Mr. Moron later recanted his confession and claimed the “missing” stocks were actually transferred to other brokers on instructions of Ms. Lee. They were all sold through a certain Julieto Sulapas, a contact of Lucy Lee.
It turned out, Mr. Moron was given the company’s access codes and allowed to trade shares upon the instruction of Ms. Lee. This happened over some amount of time, even as Moron did not have a license to trade on the floor.
I’m not taking sides, but Ms. Lee was the only registered salesman in R&L and should have not given Mr. Moron the necessary credentials to execute EQ trades.
For years, Mr. Moron’s theft was unnoticed since he was in control of arranging the reports required by the owners.
Let us take a look at the other side of the fence and find out why the Lees do not have knowledge about the business collapse.
Mr. Ramon Lee, R&L nominee, president, and salesman died last December 2017.
Lucy Linda Lee was at the helm as nominee and general manager, and in February 2018 she was appointed as the company’s treasurer.
Joseph D. Lee moved up to president and board chairman from vice president and treasurer.
There were other Lee movements; Kimberly Anne E. Lee was appointed vice president on top of her seat on the board; and board member Jordan Nino Lee was promoted to assistant manager from trading floor assistant.
I would say the company positions occupied by the heirs was a sound management decision to keep the business afloat and to keep full control of the company. Joseph and Lucy were pulling the strings to ensure financial stability.
My question is, how couldn’t they know about this fraud???
It’s hard to believe that they had no idea about this issue if it went on for about 10 years. Hadn’t anyone of them in the company ever noticed it?
How about you, what do you think?
At this point I can only speculate on what happened. It’s hard to come up with a definite conclusion without the facts surrounding the case. Let us wait for the results of SEC and the police authorities investigating the crime.
The regulations are in place it’s a matter of policing the ranks by the PSE and SEC authorities to see to it that member brokers are adhering. To avoid the R&L fiasco, only licensed brokers should trade on the floor.
There were and there will be scams with different modus and magnitude. Protection of investors can be achieved only through diligence and changes to correct deficiencies by concerned authorities.
