Press Release
March 11, 2009


The Securities and Exchange Commission has been flagrantly lax and extremely negligent in performing its mandate of protecting the public against companies that solicit funds in trust, such as banks and pre-need corporations. The most blatant of these cases is that of the Legacy Group that has bilked hundreds of depositors and subscribers in what appears to be a Ponzi or double-your-money scam.

It has become clear from the Senate hearings that one of the reasons the SEC has been blatantly irresponsible and negligent in supervising these corporations is that some of their officers have protectors or patrons (padrinos) in the SEC. Yesterday Malacanang has instructed SEC Commissioner Jesus Martinez to go on leave to allow the administrative and criminal investigation against him to proceed unimpeded.

As SEC commissioner, Martinez was assigned to oversee or supervise the pre-need industries to see to it that they comply strictly with the SEC law and regulations protecting their plan holders or subscribers. But it appears, according to witnesses, that he accepted a house and lot and some cash from Celso de los Angeles, the head of the Legacy Group. Of course this was denied, but we cannot blame the public that this was the reason that for a long time the Legacy Group was allowed to continue operating even though it had been facing difficulties in its cash flow in servicing its clients.

I remember that sometime ago I called the attention of the SEC to a number of pre-need firms that appeared to be in trouble. Why was not the SEC active in informing the public through the media about the true financial state of pre-need firms and insurance companies so that they can be properly advised? After all it is the job of the SEC to monitor the viability of these companies to protect potential depositors and clients. So it appears that the SEC has not been pro-active in performing its mandate because it has been trying to protect some favored companies.

The Ombudsman should look into the criminal aspect of this matter.

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