The Securities and Exchange Commission (SEC) has revoked the broker-dealer registration of Mount Peak Securities Inc. after uncovering widespread regulatory violations, fraudulent financial reporting, and the use of a dummy account by the firm’s top executive.

The regulator’s Markets and Securities Regulation Department canceled the registration for infractions spanning 12 separate provisions of the Implementing Rules and Regulations of the Securities Regulation Code.

Alongside the corporate penalty, the SEC permanently barred Mount Peak President Wilster S. Gaweco and associated person Marie Stephanie Gaweco from the industry, revoking their respective licenses. The regulator levied a consolidated fine of ₱17.25 million against the parties involved.

The enforcement action stems from an earlier probe by the Capital Markets Integrity Corp., the independent audit arm of the Philippine Stock Exchange. The compliance check exposed deep-seated irregularities across Mount Peak’s books, records, and internal IT infrastructure, prompting the CMIC to place the brokerage under involuntary suspension in August 2025 to protect the investing public.

Central to the fraud was an admission by Gaweco that a customer account under the name of Michael Malate was a dummy entity operated solely for the president's personal benefit. Mount Peak allegedly routed proprietary trades through this account and falsified its information to dodge regulatory scrutiny. Investigators also flagged a forged signature on a legitimate client’s 2024 account forms, which contradicted details provided the previous year.

The SEC ruled that the creation of the dummy account, coupled with unauthorized securities trading despite insufficient client positions, violated statutory ethical standards requiring broker-dealers to maintain high principles of commercial honor.

Operationally, the brokerage failed to safeguard market integrity due to severe defects in its back-office system. The SEC noted the presence of unidentified user IDs, a complete lack of independent supervision, and erratic, system-generated reports.

Furthermore, Mount Peak reported untruthful data within its customer ledgers and detailed collateral valuation reports. In August 2024, investigators discovered that names printed on physical stock certificates either did not exist in the company’s security ledger or failed to match recorded stock positions.

The firm also misreported its monthly aging schedules for customer receivables, with collateral totals failing to reconcile against statements of accounts. These accounting discrepancies masked a severe capital shortfall.

While brokerages must maintain a risk-based capital adequacy ratio of at least 110 percent, a retroactive adjustment of Mount Peak’s books by the CMIC revealed the firm was deeply non-compliant. The corrections also pushed Mount Peak’s unimpaired capital below the statutory ₱30 million minimum.

Instead of halting operations or alerting regulators to the breach, Mount Peak actively submitted doctored capital adequacy reports to feign compliance, according to the SEC decision. The brokerage also emptied its Reserve Bank Account, booking a zero balance in August 2024 and February 2025, leaving no funds safeguarded for client balances.

The SEC characterized the systemic failures—ranging from the president’s self-dealing to the broken back-office infrastructure—as evidence of a completely broken compliance function. Mount Peak has appealed the MSRD's decision, which is currently pending review before the Commission En Banc.