The determination of the precriptive period, or the length of time within which an action must be filed before it is permanently barred, is generally easy. The prescriptive period is normally included in the law itself. The determination of the prescriptive period under the Securities Regulation Code (Republic Act No. 8799) is not simple, perhaps consistent with the esoteric nature of its subject matter.
Violations of the SRC may give rise to three different kinds of actions — criminal, civil, and administrative.
CIVIL CASES
I. For Section 56 of the SRC (Civil Liabilities on Account of False Registration Statement): 2 years after the discovery of the untrue statement or the omission, but not more than 5 years after the security was bona fide offered to the public.
II. For Subsection 57.1(a): 2 years after the violation upon which it is based, but not more than 5 years after the security was bona fide offered to the public.
III. For Subsection 57.1(b): 2 years after the discovery of the untrue statement or the omission, but not more than 5 years after the security was bona fide offered to the public.
IV. Two (2) years after the discovery of the facts constituting the cause of action and within 5 years after such cause of action accrued, for “any other provision” of the SRC, to wit:
- Section 58 (Civil Liability For Fraud in Connection With Securities Transactions)
- Section 59 (Civil Liability For Manipulation of Security Prices)
- Section 60 (Civil Liability With Respect to Commodity Future Contracts and Pre-need Plans)
- Section 61 (Civil Liability on Account of Insider Trading)
CRIMINAL CASES
The imposable penalty for criminal offenses under the SRC is imprisonment of not less than 7 years nor more than 21 years. Considering that the SRC does not explicitly provide for the prescriptive period for criminal actions, the general law on prescription applies — Act No. 3326.
A criminal action for any violation of the SRC prescribes in 12 years, counted from: (a) the day of the commission of the violation, if such commission is known; or (b) its discovery, if not then known.
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