Securities fraud—often called “illegal trading”—covers a range of misconduct in the Philippine capital markets, from insider trading and market manipulation to broker misrepresentation and unauthorized trades. This guide explains the legal framework, where and how to file, what evidence you need, potential outcomes, and practical strategies to protect your rights and improve the odds that authorities can act.

Important: This is general information for educational purposes and is not a substitute for legal advice. Consider consulting counsel experienced in capital markets and criminal procedure.

1) What counts as “securities fraud” or “illegal trading”?

Under the Securities Regulation Code (SRC; Republic Act No. 8799) and related rules, common violations include:

Insider trading: Trading while in possession of material non-public information, or tipping others who trade.
Market manipulation: Pump-and-dump schemes, wash sales, matched orders, painting the tape, and other practices that create a false or misleading appearance of market activity or price.
Fraudulent transactions and misrepresentation: False statements or omissions in selling securities; Ponzi-style “investment programs” that involve the public; boiler-room cold calls; misleading online solicitations.
Broker/dealer misconduct: Unauthorized trading in a client account, churning (excessive trades for commissions), front-running, improper margin liquidation, failure to execute client orders, or unsuitable recommendations.

Securities include shares, bonds, commercial papers, investment contracts, and many pooled/managed investments. If an offering involves money from the public with an expectation of profits primarily from someone else’s efforts, it may be a security, even if marketed under a different label.

2) Which agencies have jurisdiction?

Multiple institutions can (and often should) be engaged, depending on what happened:

Securities and Exchange Commission (SEC) Through its enforcement arm, the SEC investigates SRC violations, issues cease-and-desist orders (CDOs), imposes administrative fines and sanctions, revokes registrations and licenses, and may refer cases for criminal prosecution.
Department of Justice (DOJ) / Prosecutors / Special Commercial Courts Criminal cases for SRC violations are prosecuted by the DOJ and tried in the Regional Trial Courts designated as Special Commercial Courts.
Philippine Stock Exchange (PSE) and CMIC (Capital Markets Integrity Corporation) For acts involving exchange trading or brokerage conduct, you may lodge an investor complaint with CMIC (PSE’s independent regulation arm). CMIC enforces broker rules, audits trading participants, and can order restitution/discipline. It also oversees an Investor Compensation/Protection mechanism for certain broker failures (subject to caps and conditions).
Law enforcement units The NBI and PNP (incl. Anti-Cybercrime Group) can investigate fraud, especially when online solicitation, forged documents, or cyber elements are involved.
Bangko Sentral ng Pilipinas (BSP) and Insurance Commission (IC) If banks, e-money issuers, insurance or pre-need products are involved, parallel complaints may be proper with their regulators.
AMLC (Anti-Money Laundering Council) Where investor funds are laundered, reports and asset-freezing measures may apply.

3) Your pathways to relief (administrative, criminal, civil)

A. Administrative complaint (SEC)

Goal: Regulatory enforcement—CDO, fines, suspension/revocation of licenses/registrations, public warnings, disgorgement/restitution in appropriate cases.
When useful: To stop an ongoing scheme quickly; to sanction unregistered investment solicitations; to penalize manipulative or fraudulent activity; to discipline erring intermediaries.

B. Criminal complaint (via DOJ)

Goal: Imprisonment and criminal fines for persons responsible.
When useful: Clear, willful violations (insider trading, manipulation, fraud, large-scale investment scams).

C. Civil action for damages (courts)

Goal: Monetary recovery (rescission, actual/compensatory, exemplary damages; attorney’s fees).
When useful: To recover losses from misrepresentation, unsuitable sales, unauthorized trades, or reliance on false statements. Civil actions may be filed separately from administrative/criminal proceedings.

Many cases involve parallel tracks: file with the SEC (to stop the conduct), the DOJ (for prosecution), and a civil suit (for damages).

4) What to prepare before filing

Evidence checklist (the stronger your documentation, the faster authorities can move):

Identity & authority
- Valid ID; if filing for a company/trust, board resolution or SPA/authorization.
Transaction records
- Trade confirmations, order tickets, broker statements, account opening forms, margin agreements, chat/email instructions, recorded calls (if any), SMS/online messages, screenshots, social-media posts, pitch decks, whitepapers, and websites/URLs.
- Bank transfers/receipts, e-wallet proofs, remittance slips; proof of cryptocurrency on-/off-ramps and wallet addresses where relevant.
Securities/issuer data
- Prospectus, information statements, term sheets, offering circulars; SEC registration/permit copies (if any) or proof they do not exist.
Timeline
- A dated chronology: solicitation → investment → trades/communications → loss discovery → complaint steps.
Loss quantification
- Computation of losses (and how calculated), including opportunity costs if asserting them.
Witnesses and co-investors
- Affidavits or contact details of others similarly situated; employee/insider tipsters (if any).
Preservation
- Keep originals; export metadata where possible; disable auto-delete on messaging apps; avoid “editing” files—save new copies.

5) How to file with the SEC (administrative route)

Step 1: Draft a Sworn Complaint-Affidavit Include: (a) your identity and standing, (b) respondents’ full names/roles (brokers, sales agents, officers, influencers), (c) detailed facts and timeline, (d) specific SRC violations alleged (e.g., insider trading, manipulation, unregistered sale), (e) relief sought (CDO, fines, revocations, asset freezes/restitution where allowed), and (f) a verification and certification against forum shopping. Attach evidence as annexes, properly labeled. Sign the affidavit under oath before a notary or authorized official.

Step 2: File with SEC Enforcement Submit your complaint and annexes through the SEC’s enforcement/investor protection channel (electronic or physical, as available). Keep a filed/stamped copy or electronic acknowledgment.

Step 3: Participate in the investigation Expect a show-cause or clarificatory process. The SEC may issue a CDO on a prima facie showing (especially for ongoing solicitations), require respondents to answer, and impose administrative sanctions. The SEC may also refer the matter to the DOJ for criminal action.

Step 4: Follow compliance directives If the SEC orders restitution/disgorgement or imposes administrative penalties, monitor compliance and provide bank details or claim forms as directed.

6) How to commence a criminal case (DOJ/prosecutor route)

Step 1: Affidavit-Complaint & Annexes Prepare an Affidavit-Complaint narrating facts, identifying offenses under the SRC and related laws (e.g., estafa, cybercrime if applicable), and attach your evidence. Have it notarized.

Step 2: File with the City Prosecutor or DOJ Venue is typically where any element of the offense occurred (e.g., where the solicitation, execution of trades, payment, or loss occurred). You may coordinate with the SEC or NBI to ensure alignment of theories and evidence.

Step 3: Inquest or preliminary investigation Respondents file counter-affidavits; a Resolution will determine probable cause. If found, an Information is filed with the Special Commercial Court. Warrants and asset restraint measures may follow where warranted.

Prescription SRC violations generally have prescriptive periods (counting from commission or discovery, depending on the violation). If your case is older, consult counsel promptly to evaluate tolling and the applicable period.

7) Civil remedies for damages

You may file a separate civil action (contractual and/or tort) asserting:

Rescission and restitution for purchases via false or misleading statements/omissions;
Damages for unsuitable recommendations, unauthorized trading, churning, or negligent supervision;
Disgorgement of profits (e.g., short-swing or insider trading contexts, where applicable);
Interest, attorney’s fees, and costs.

Coordinate with your administrative/criminal filings so pleadings are consistent, and consider pre-judgment remedies (garnishment, asset freezing under separate statutes) where available.

8) Complaints involving exchange trading or your broker (PSE/CMIC track)

If the matter involves listed shares or a trading participant:

Notify your broker’s compliance department in writing and demand a written explanation and corrective action.
File an investor complaint with CMIC (include account details, order/trade logs, timestamps, and the broker’s response).
CMIC can investigate, audit, and direct remedial steps; it may coordinate with the SEC for broader enforcement.
If your loss stems from a broker failure or insolvency, inquire about the investor protection/compensation mechanism overseen by CMIC (subject to eligibility and caps).

This track can be pursued in parallel with SEC/DOJ actions.

9) Special issues

Unregistered online “investments”: Many social-media schemes involve unregistered securities and illegal solicitation. Even if pitched as “membership,” “forex robots,” “AI trading,” “crypto mining,” or “e-commerce shares,” they may still be investment contracts. File with the SEC promptly to seek a CDO and public advisory.
Whistleblowers/insiders: Anonymous tips may prompt inquiries, but sworn affidavits with evidence are typically necessary for formal action. If employment or confidentiality issues exist, seek counsel before filing.
Cross-border actors: Use transaction trails (bank/e-wallet/crypto exchanges, IP logs). The SEC and law enforcement may pursue mutual assistance with foreign regulators, but this takes time—your documentation is crucial.
Tax and AML implications: Fraud proceeds may implicate tax evasion and money laundering; separate reports or coordination with BIR and AMLC may support asset recovery.

10) Possible outcomes and penalties

Administrative: CDOs; public advisories; fines, suspension/revocation of registrations and licenses; disgorgement/restitution in proper cases; officer/director disqualification.
Criminal: Imprisonment and fines set by the SRC and related laws (insider trading, manipulation, fraudulent sales are punishable offenses).
Civil: Rescission, damages, interest, and fees. Courts may award exemplary damages for egregious conduct.

11) Practical tips to strengthen your case

File early: Prescription can bar actions; early CDOs can limit harm to others and preserve assets.
Be precise: Tie allegations to specific trades, timestamps, and messages; avoid generalities.
Maintain chain of custody: Keep originals; for digital evidence, export with timestamps and metadata when available.
Coordinate tracks: Ensure your SEC, DOJ, CMIC, and civil pleadings tell the same story.
Mind confidentiality: If you’re a company insider, manage MNPI (material non-public information) carefully and seek counsel regarding privilege and NDAs.
Costs & timelines: Filing with regulators is often low-cost, but expert analyses (e.g., trade reconstruction, forensic imaging) may be needed; ask for fee schedules and expected stages up front.

12) Templates (you can adapt these)

A. Outline: Complaint-Affidavit (SEC or DOJ)

Title/Caption (Name of agency/city prosecutor; Parties)
Affiant’s Identity (full name, address, ID; authority if corporate)
Overview (one paragraph describing the scheme/misconduct)
Detailed Facts & Timeline (dated events; who said what; trades/payments)
Legal Basis (SRC provisions, rules, and implementing regulations pertinent to manipulation, insider trading, fraud, unregistered sale)
Injury (loss computation; ongoing public harm)
Reliefs Sought (CDO, administrative sanctions, referral for prosecution; in criminal affidavit, the specific offenses charged)
Annexes (A: account opening; B: confirmations; C: chat logs; D: bank proofs; etc.)
Verification & Certification Against Forum Shopping
Jurat (notarization)

B. Demand Letter to Broker (for CMIC track)

Identify account and trade(s) in dispute;
Cite the rule/policy allegedly breached (e.g., unauthorized trade, unsuitable recommendation, failure to execute);
Demand reversal/restitution with a computed figure;
Request delivery of complete order and execution logs, voice recordings, and compliance review;
Set a response deadline (e.g., 5 or 10 business days).

13) Quick decision tree

Is the scheme ongoing or public-facing? → File SEC complaint now; ask for CDO.
Were you harmed by a broker’s trading or exchange activity? → File CMIC/PSE complaint and notify SEC.
Do you want imprisonment/fines for offenders? → File DOJ/Prosecutor case (consider inquest if caught in flagrante).
Do you need money back? → File a civil action for damages (plus administrative/CMIC routes).

14) Frequently asked questions

Can I file anonymously? Tips can be anonymous, but formal action usually needs a sworn complainant and evidence.

Do I have to choose only one route? No. Parallel administrative, criminal, and civil actions are common and often strategic.

What if the investment is “crypto” or offshore? If it was offered/sold to the Philippine public, Philippine securities and consumer financial protection laws may apply. Document on-/off-ramp flows and Philippine touchpoints (solicitation, payment, victims).

How long will this take? It varies widely. Strong, well-organized evidence and multiple affected investors generally move matters faster.

Final word

Securities fraud cases are winnable when facts are organized, documents are complete, and forums are used strategically. If you’re unsure where to start, begin with an SEC complaint to stop further harm, notify CMIC for broker-related issues, and consult counsel to structure criminal and civil actions that fit your objectives.