Topic for Removal Exams

All those with incomplete grades should each submit a 30-page paper on the topic: "Should Securities Regulation Be Abolished?". The paper should define the nature and scope of securites regulation and evaluate its relevance in the Philippine society. Do not copy or plagiarize works on the internet or elsewhere. If I catch any one of you doing it, I will give you a failing mark, and file an opposition to your application to take the bar exams. I will make sure that all those who will cheat will never become lawyers. Try me. The deadline is March 5, 2006. Email your papers to marvin_aceron2003@yahoo.com. No more removal exams will be given after this date.

REMOVAL EXAMS

All those taking removal exams for Securities and Spec Pro, please send me an email request by December 19, 2005. Those who fail to take the exams will receive a final grade of F. Your removl exams will be sent to you by email.

Some Notes on the Final Exams

I've finished checking and re-checking your finals. The results are quite an extreme. At least two people have billed a perfect PhP 1 million, while others have obviously been pretending to study all these months.

Here are my views on the issues raised in the exams.

Question No 1. The Investment House Buy Back Scheme

The scheme is clearly illegal, because it guarantees the buyers of the securities a profit of PHP .10 per share in thirty days. This has been deemed to be a form of market manipulation. It interferes with the market forces of supply and demand.

Question No. 2. The Currency Trader

I agree with most of you that the certificates are probably securities. Norman makes a good point in determining whether these are actually deposit instruments (or loans) or securities. If you spot that issue, you're okay. But the SEC said they were not securities, and that it is not the SEC which has jurisdicition but the Bangko Sentral ng Pilipinas because what was involved was dollars. Geez, and guess what? When the matter was brought to the BSP, it said the SEC had jurisdiction. This is what you call the legal ping-pong, Philippine style.

Question No. 3 the Pac Man

The acquisition of the publicly held school should comply with the tender offer rules and therefore it may not be done secretly. In addition, the acquiring entity is a publicly-llsted corporation. It has to disclose the material event of acquisition.

Question No. 4 People vs. Mr. Email

Most of you forgot that you are counselling the defendant, therefore you have to tell him his defenses. Sure, he looks guilty, but, he is not going to pay you if you keep telling me him that. On this point, Lorelie pointed out correctly that Mr. Email may not be liable under the classical theory of insider-trading. And guess what? In view of the dearth of Philippine jurisprudence on insider-trading that goes hand in hand with the SEC's record of prosecution and conviction of insider-traders, which is a BIG FAT ZERO, we don't really know if our Supreme Court will adopt the Classsical Theory or the Misappropriation Theory. So Mr. Email might still get off the hook. Wouldn't he pay you PHP 100,000 acceptance fee if you tell him that?
Think like a lawyer.

Assignment for Final Class October 20, 2004

The topic for our final class is as follows:

Legal Issues in Opening the Philippine Securities Market to the World

Having studied Philippine Securities Law, what do you think are the legal issues that need to be addressed when foreign securities are issued and traded in the Philipines?

To put it in another way, if we were to allow a foreign security (like for example Google shares) to be traded and sold in this country, what legal problems will arise, given the present legal landscape of the Philippine securities market? What are your possible solutions?

I need insights. To help you think about it, try searching for articles in google on global securities regulation.

If your insights impress me, I will reciprocate by giving an open book exam for your finals.

If you already have answers before the actual class, you can post a comment here by clicking the link below. Comments will be given full credit as a recitation in class.

Assignment for October 14, 2004

Please study the following:

1. The jurisdiction of the SEC (Chapter II of the Securities Regulation Code)

2. The Securitization law of 2004. Click here for a copy.

Topics for Reporting

As discussd in class, the following are the topics for the group reports:

1. The Google IPO
2. Enron Corp. and Arthur Andersen scandal
3. Worldcom Scam
4. Nick Leeson and Barings Bank

The groups are required to prepare a presentation to the class on the above topics. Relate the story and show its relevance to our class. For research materials, you can check the internet. After the class presentation, the groups are likewise required to submit a ten-page summary of the report, which should include the sources.

The presentation shall be graded as follows: 50% substance 50% creativity of presentation.

The written report will be graded as follows: 50% substance and 50% form of report.

THE WHARF (HOLDINGS) LTD. et al. v. UNITED

Please also read this case.

THE WHARF (HOLDINGS) LTD. et al. v. UNITED
INTERNATIONAL HOLDINGS, INC., et al.

DIRKS v. SEC, 463 U.S. 646 (1983)

Additional reading on insider trading. Required reading.

DIRKS v. SEC, 463 U.S. 646 (1983)

STRONG v. REPIDE, 213 U.S. 419 (1909)

Of course, we are obligated to read this: The Philippines's contribution to insider trading legal literature of the US. It's still good law. Required reading.

STRONG v. REPIDE, 213 U.S. 419 (1909)

The Case of James T. Sherwin

Additional reading for next meeting. This case shows price manipulation does not have to be as grand as the BW Scam.

The Case of James T. Sherwin

ERNST & ERNST v. HOCHFELDER, 425 U.S. 185 (1976)

Please study this case:

ERNST & ERNST v. HOCHFELDER, 425 U.S. 185 (1976)