Primanila Plans, Inc.

v.
Securities and Exchange Commission
G.R. No. 193791
August 6, 2014
Facts:

Primanila Plans, Inc. is a SEC registered pre-need company that invests funds received
from its members for the latter’s retirement, monthly pension or for other foreseeable needs in
the future. In 2008 however, after several investigations conducted by SEC, it was found that
Primanila has been committing acts in violation of The Securities and Regulation Code when it
offered to the public for sale its Primasa plans without registering the said product with SEC.
Thus, after the investigation without notice or hearing, SEC issued a cease and desist order in
order to prevent further violations and in order to protect the interest of its planholders and the
public. Primanila contested the issuance on the ground that they were denied due process
because the order was issued without any notice or formal charge that could have allowed it to
interpose defenses. SEC denied the motion, which the CA affirmed as well, hence this petition.

Issue: Whether or not SEC can issue a cease and desist order without notice and hearing.

Ruling: Yes.

The law is clear on the point that a cease and desist order may be issued by the SEC motu
proprio, it being unnecessary that it results from a verified complaint from an aggrieved party. A
prior hearing is also not required whenever the Commission finds it appropriate to issue a cease
and desist order that aims to curtail fraudor grave or irreparable injury to investors. There is good
reason for this provision, as any delay in the restraint of acts that yield such results can only
generate further injury to the public that the SEC is obliged to protect. But a cease and desist
order may only be issued by the Commission after proper investigation or verification, and upon
showing that the acts sought to be restrained could result in injury or fraud to the investing
public.In this case, Primasa plans were not registered with the SEC and Primanila was then barred
from selling and offering for sale the said plan product. A continued sale by the company would
operate as fraud to its investors, and would cause grave or irreparable injury or prejudice to the
investing public, grounds which could justify the issuance of a cease and desist order under
Section 64 of the SRC.

by Joyce Alegre

COSMOS BOTTLING CORPORATION v. COMMISSION EN BANC OF SECURITIES, GR No. 199028,

2014-11-19
Facts:

Cosmos's failure to submit its 2005 Annual Report to the SEC within the prescribed period...
requested an extension of time within which to file the same

SEC-CFD, through... respondent Director Justina F. Callangan (Director Callangan), sent Cosmos a
letter[7] dated May 18, 2006 denying the latter's request... ordered Cosmos to show cause why
the Subject

Registration/Permit should not be revoked for violating Section 17.1(a)[8] of Republic Act No.
8799, otherwise known as "The Securities Regulation Code" (SRC).

Cosmos sent a reply-letter[10] to the SEC-CFD... due to the non-completion by its external
auditors of their audit procedures.

Cosmos implored the SEC-CFD to... reconsider

SEC-CFD ordered the suspension of the Subject Registration/Permit(suspension order)for a

period of 60 days from receipt of the same, or until Cosmos files its 2005 Annual Report,
whichever is earlier... failure to submit its 2005 Annual Report within the 60-day period...
revocation of the Subject Registration/Permit.

After the lapse of the aforesaid period

Cosmos still failed to comply... revocation proceedings commenced on August 22, 2007...
submitted its formal explanation

Cosmos sub

Cosmos submitted its formal explanation,... delay... occasioned by the following factors:... non-
completion of its 2005 Audited Financial Statements by its external auditor; (b) the adoption of
new accounting... standards which gave rise to additional disclosures in the financial reports; and
(c) the sale of Coca-Cola Bottlers Philippines, Inc., which is the parent company of Cosmos, to
Coca-Cola South Asia Holdings, Inc.

October 31, 2007, Cosmos finally submitted its 2005 and 2006 Annual Reports to the SEC.

requesting that the latter lift the suspension... order

SEC-CFD referred the matter to the SEC En Banc

SEC En Banc issued

Resolution No. 87... they resolved to: (a) deny Cosmos's request for the lifting of the suspension
order; and (b) revoke the Subject Registration/Permit

Cosmos a... osmos appealed to the SEC En Banc.

SEC En Banc dismissed Cosmos's appeal.

SEC En Banc's Resolution No. 87, s. 2008, and thus, should be... considered an issuance of the SEC
En Banc itself.

Cosmos filed a petition for review before the CA

CA affirmed the SEC En Banc Ruling.

SEC-CFD merely acted as an arm of the SEC En Banc when it issued the Revocation Order against
Cosmos... it was simply a reiteration... of Resolution No. 87,... SEC En Banc correctly dismissed
Cosmos's appeal.

Cosmos's appeal, which was treated as a prohibited motion for reconsideration under the 2006
SEC Rules of Procedure... did not toll the reglementary period for filing an appeal... already lapsed
into finality... reconsideration,... enied in

Issues:

whether or not the CA correctly treated Cosmos's appeal before the SEC En Banc as a motion for
reconsideration, and consequently, affirmed its dismissal for being a prohibited pleading under
the 2006 SEC Rules of

Procedure.

Ruling:

The petition is meritorious

Further, both the SEC En Banc and the CA erred in holding that the Revocation Order merely
reflected Resolution No. 87, s. 2008, and thus, should already be considered as the ruling of the
SEC En Banc in this case

SEC-CFD's referral... of the case to the SEC En Banc... was merely an internal procedure inherent
in the exercise by the SEC of its administrative and regulatory... functions.

Cosmos never knew of the existence of Resolution No. 87, s. 2008,... not furnished a copy thereof;

Cosmos was only apprised of the existence... of Resolution No. 87, s. 2008 when it was finally
cited by the SEC En Banc in its September 10, 2009 Decision.

when Cosmos received the Revocation Order, it had every reason to believe that it was issued by
the SEC-CFD as an

Operating Department of the SEC... appealable to the SEC En Banc... outright dismissal of
Cosmos's appeal by the SEC En Banc effectively denied it of its right to appeal

Revocation Order is properly deemed as a decision issued by the SEC-CFD as one of the Operating
Departments of the SEC, and accordingly, may be appealed to the SEC En Banc,... the Court deems
it prudent to reinstate and remand the case to the SEC En Banc for its resolution on the merits.

the petition is GRANTED

Decision dated April 25, 2011 and the Resolution... hereby SET ASIDE. The instant case is
REMANDED to the Securities and