Makati court affirms Calata execs’ conviction in market manipulation case

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A 2024 ruling found Calata Corporation chief Joseph Calata guilty of making 'misleading and exaggerated' claims over a casino venture in Cebu

MANILA, Philippines – A Makati City court affirmed the conviction of former officers of delisted firm Calata Corporation over market manipulation, the Securities and Exchange Commission (SEC) said.

In a statement on Friday, June 6, the SEC said that Branch 148 of the Makati City Regional Trial Court denied the motion for consideration filed by Calata’s officers, who sought their acquittal on two counts of violating Section 24 of the Securities Regulation Code (SRC).

This provision prohibits market manipulation, or publishing false or misleading information that could encourage investors to purchase securities or stocks of a certain company. 

In 2024, former Calata Corporation chair Joseph Calata and corporate secretary Jose Marie Fabella were found guilty of making “misleading and exaggerated” claims over the company’s partnership with Sino-America Gaming and Macau Resources Group to develop a $1.4 billion resort and casino called Mactan Leisure City.

Calata Corporation, in 2016 disclosures to the Philippine Stock Exchange, claimed the project was expected to begin operations in 2020 and rake in gross annual revenues of P55.74 billion. These triggered a surge in the trading volumes of Calata Corporation, which skyrocketed 2,455% on the day of the disclosure, and jumped 196% the next trading day. (READ: SEC files complaint vs Calata over botched Cebu casino project)

The court ruled that the disclosures contained “unfounded promises and exaggerations” and were publicized despite lacking a license application with the Philippine Amusement and Gaming Corporation for the project.

The Philippine Stock Exchange also ordered the delisting of Calata in 2017. (READ: Philippine Stock Exchange officially orders Calata delisting)

In their motion for reconsideration, Calata and Fabella claimed that they did not violate Section 24 or the SRC and instead violated Section 17, which pertains to reportorial requirements and does not involve penal sanctions.

“The fact that [Calata and Fabella] may have also committed an administrative violation of Section 17 of the SRC is not a bar to prosecution under Section 24 of the [SRC],” the court wrote.

The Makati court also rejected Calata officers’ claim that there was insufficient evidence to prove their guilt beyond a reasonable doubt since no witnesses testified to suffering losses from the disclosures.

“Actual loss or harm, much less actual public harm, is not an element of the offense. Thus, the Court reiterates that the evidence presented by the prosecution proves beyond a reasonable doubt the criminal liability of the accused,” the court ruled.

The SEC said that eight other Calata Corporation shareholders were previously indicted for manipulating the market to encourage the public to buy the company’s shares. – Rappler.com