R&L scam

The R&L Investments shutdown: Should small investors be worried?

Last June 11, the Securities and Exchange Commission ordered the cancellation of the license of R&L Investments after the 50-year-old brokerage found itself in the middle of a fraud that led to the loss of its clients’ shares of stocks worth at least P700 million.

The case started in 2019 with the alleged discovery by R&L Treasurer and nominee Lucy Lee of more than 1 million shares of stock that were missing.

In her statement before the police, Lee said a clerk and long-time R&L staff, Marlo Moron, admitted to the theft. Moron even executed a confession to the crime.

Moron, however, gave another side to the story. In his counter-affidavit, he said it was Lucy who masterminded everything. He said he was only a clerk originally hired to run errands for the firm. But later on, he was given access codes that allowed him to trade shares, as instructed by Lucy.

He was even made to trade on the floor even without a license.

We will no longer discuss other facts of the case because authorities are presently investigating the crime.  I, however, came across an article in Bilyonaryo.com where the police handling the case said it was very difficult for them to believe that Moron could have done it alone, especially if this fraud went on for about 10 years.

Again, let’s let the police and SEC investigate who is really behind the crime. But as a small investor like myself who invest our hard-earned money in the Philippine Stock Exchange, I couldn’t help but get worried how this went unnoticed by the PSE.

R&L Investments

I know for a fact that there are auditors and compliance officers who review every transactions in the stock market closely not only to protect the investments of the public, but also to ensure the integrity of the market capital.

For the sake of young and noob investors, I hope the PSE and the SEC adopt more stringent measures to prevent incidents similar to what happened in R&L. I think apart from going after people behind the crime, steps must be taken to protect the investors.

Otherwise, we might as well anticipate case of fraud to come out, unless loopholes are corrected and integrity is restored to protect the hard-earned money of the investing public.

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