G.R. No. 159008 . January 23, 2007.
QUEENSLAND-TOKYO COMMODITIES, INC. and CHARLIE COLLADO, Petitioners, vs. MARGIE MATSUDA, Respondent.

FACTS

Respondent Margie Matsuda filed a complaint with the Securities and Exchange Commission (SEC) against petitioner corporation Queensland-Tokyo Commodities, Inc. (QTCI), a commodity futures broker, and its officer Charlie Collado, for recovery of investments and damages. Matsuda alleged she invested a total of P2,150,000.00 based on representations that her account would be handled by licensed consultants. She claimed the contracts were null and void because they were traded and supervised by unlicensed employees, specifically Collado and Felix Sampaga, in violation of the Revised Rules on Commodity Futures Trading. She demanded the return of her investments, plus moral and exemplary damages and attorney’s fees.
Petitioners denied the allegations, asserting that Matsuda opened the accounts voluntarily and that her attorney-in-fact was actually a licensed salesman, Jose Colmenar. They contended Collado, who signed the customer agreement in his official capacity, did not need a license for that function and was not involved in marketing. The SEC Hearing Officer ruled in favor of Matsuda, ordering petitioners and Sampaga to jointly and severally return her investment of P2,082,021.40, plus attorney’s fees. The SEC en banc and the Court of Appeals affirmed the decision.

ISSUE

The core issues are: (1) whether petitioners’ appeal to the SEC en banc was timely filed; and (2) whether the Court of Appeals erred in affirming the SEC’s factual findings on the nullity of the contracts and the liability of petitioners.

RULING

The Supreme Court denied the petition. On procedure, the Court found petitioners’ appeal to the SEC en banc was filed out of time. Petitioners could not selectively apply procedural rules; having filed a motion for reconsideration with the Hearing Officer, they were bound by the applicable period for appealing from the denial of that motion, which they failed to observe.
On the merits, the Court upheld the factual findings of the SEC Hearing Officer, as affirmed by the Court of Appeals. The issues raised were factual, and such findings, when supported by substantial evidence, are conclusive and binding on the Supreme Court, especially when the factual conclusions of the SEC and the CA are in harmony. The Court found no cogent reason to disturb the lower tribunals’ unanimous conclusion that petitioners QTCI and Charlie Collado, along with Felix Sampaga, assented to and participated in the unlawful acts of trading commodity futures contracts without the requisite SEC license, in violation of Sections 20 and 33-A of the governing rules. This violation rendered the contracts null and void, entitling Matsuda to a return of her investments. The corporate officer, Collado, was held jointly and severally liable under Section 31 of the Corporation Code for his active participation in the illegal acts of the corporation.