ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT

MEMORANDUM

FOR : DIRECTOR ROMUALDO PADIERNO

Human Resource and Administrative Department

FROM : ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT

SUBJECT : ILLICIT RELATIONSHIP BETWEEN CO - EMPLOYEES

DATE : AUGUST 1, 2017

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Respectfully forwarded to your Department is the Investigation Report dated June 11, 2017 relative
to an alleged extra-marital affair between two counsel of the Enforcement and Investor Protection
Department (EIPD). The subject of such investigation are Attys. Vaviana Calala and Leopold Mavarias
(respondents). Both lawyers are Securities Counsel III of the Special Operations Division.

The case stemmed from an anonymous letter from a certain employee who used the alias “Concerned
Employee X” reporting the alleged immoral conduct and unbecoming behavior of respondents by
having an illicit relationship in spite of both lawyers being married to different partners. This
prompted the Department to create a Special Hearing Panel (SHP) composed of Attys. Chona Tamargo,
Alonso Lazano and Jun Jun Riguera for the purpose of conducting a preliminary investigation.

During the preliminary investigation, the SHP received the following evidence of respondents alleged
extramarital affair from their co-employees namely:

1. Tessie Thomas’ (Tessie, SEC Examiner I) sworn statement declaring that sometime in December
2016, respondents were seen sleeping on respondent Mavarias’ cubicle in a “spooning” position.
Tessie personally witnessed the intimacy of respondents and they seemed to have engaged in
lovemaking as they slept in respondent Mavarias’ cubicle where they openly displayed their affection
for each other.

2. Perfecto Raymundo’s (Perfy, Executive Assistant to Director Acuna) sworn statement that on May
23, 2017, he heard respondentss plan of going to Sogo Hotel after office hours.

3. Emmi Hontiveros’ (Em, Securities Counsel I) sworn statement wherein she saw respondent
Mavairias fondle respondent Calala’s chest during a karaoke session at Karaoke Republic located at
SM Mall of Asia.

Respondents, on the other hand, denied the accusations against them. Respondent Mavarias, instead,
claimed that the accusation was a result of the insecurity felt by some of his co – employees because
of his growing popularity -- owing to his perceived good looks and his exemplary record as an
employee. Respondent Calala executed an affidavit likewise denying the allegations of extra-marital
affair.
Afterwards, the SHP concluded that respondents were involved in an extra-marital affair. On July 10,
2017, the Director of the EIPD sent a letter to respondents informing them of the existence of a prima
facie case against them for "illicit marital affair”, an act that brings discredit to the department and the
Commission and a cause for termination per Human Resource and Administrative Department
(HRAD) Personnel Policy. Respondents were directed to appear and be present at the HRAD Office
and then to the Commission En Banc Conference Room for a hearing.

Eventually, the Commission En Banc rendered a Decision dated July 23, 2017, informing respondents
of their termination from service as Securtities Counsel III, effective July 31, 2017, with forfeiture of
their counsel allowance and other special compensation package or benefits except the unpaid
balance of their regular salary for services actually rendered.

Finally, we are submitting this Memorandum with attached Investigation Report for the
implementation of the Commission En Banc’s Decision dated July 23, 2017.

JOSE P. AQUINO
Director

JPDP / mjdv