Legal expert from Harvard says Rappler fools us around with misleading and slanted reports against SEC

Rappler has been the talk of the town lately with stripping of license by SEC but does Rappler really has a legitimate stand on this issue? Is it really a case of shunning freedom of speech? We'll see.
Attorney Oscar Franklin Tan and Maria Ressa / Photo credit to the owner

In an opinion piece of Inquirer columnist, Atty. Oscar Franklin Tan, a legal expert and a graduate of Harvard Law school criticized Rappler for publishing “misleading” and “slanted” articles against the Securities and Exchange Commission (SEC).

Tan was one of the attorneys who defended Rappler when its sale of Philippine depository receipts (PDRs), financial instruments used to comply with Constitution’s ban on foreign control of media, to Omidyar Network (ON) in 2015 was denounced by President Rodrigo Duterte, the SEC’s basis for giving sanction to Rappler.



According to Tan, Rappler misleadingly implies the SEC approved its PDRs and also burbling misleading blurb are its ways on how to argue  its case.

Case one, Rappler misleadingly implies the SEC approved its PDRs. It restated: “PDRs were disclosed to the SEC in 2015 in compliance with the SEC’s regulations” (“FAQs: Rappler’s SEC case,” 1/22/18).

This is deceptive since according to securities law’s central rule: offers and sales of securities must be registered unless exempt from registration. Also, the SEC does not approve offers to less than 20 persons. Here, one merely files a notice that there were less than 20 investors. Rappler sent was a notice it only had one investor. The 20-person exemption is so basic that even a non investment savvy people would know better but even after this, Rappler still implies the SEC approved its PDRs.

Second, a Rappler article states: “many speculated that the regulator will go after the two broadcast giants next” (“SEC: No review of ABS-CBN, GMA PDRs after Rappler,” 1/19/18).

Rappler with this article is swinging for the fences, begging for umbrella cover under broadcast giants. Inquirer’s Doris Dumlao-Abadilla wrote the exact opposite: the SEC questioned “veto rights” in the ON PDRs not found in ABS-CBN and GMA PDRs.

PDRs’ defining term is they separate PDR holders from the company, unlike shares of stock. But the ON PDRs gave veto rights over any change in Rappler’s articles of incorporation. PDR holders and the company suddenly had a link they cannot have.

Rappler repeatedly implied its PDRs are like ABS-CBN and GMA’s valid PDRs, citing my 2017 columns. PDRs’ defining characteristic is they separate PDR holders from the company, unlike shares of stock. But the ON PDRs gave veto rights over any change in Rappler’s articles of incorporation. PDR holders and the company suddenly had a link they do not obtain.


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Source: Inquirer
Legal expert from Harvard says Rappler fools us around with misleading and slanted reports against SEC Legal expert from Harvard says Rappler fools us around with misleading and slanted reports against SEC Reviewed by Nathan Singson on July 10, 2019 Rating: 5

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