FACTS:

In November 2006, complainants Henry and Catherine Yu filed a complaint for disbarment against respondent Atty. Antoniutti K. Palaña before the Commission on Bar Discipline (CBD) of the Integrated Bar of the Philippines (IBP). The complainants alleged that the respondent committed acts of defraudation. The complainants attached their Consolidated Complaint-Affidavit, previously filed before the City Prosecutor's Office of Makati, charging the respondent and his co-accused with syndicated estafa and violation of Batas Pambansa Blg. 22 (BP 22).

The CBD found that in 2004, the complainants and other investors were persuaded by Mr. Mark Anthony U. Uy to invest in Wealth Marketing and General Services Corporation (Wealth Marketing), a company engaged in spot currency trading. They believed that the company had a "stop-loss mechanism" to protect their investments. However, it was discovered later on that Wealth Marketing's promises were false and fraudulent, and the issued checks were dishonored. Wealth Marketing ceased operations and a new corporation named Ur-Link Corporation (Ur-Link) was formed.

The complainants met the respondent at Ur-Link's office, where he assured them that Ur-Link would assume the obligations of Wealth Marketing. However, this assurance was found to be another deception. The complainants sent demand letters to Wealth Marketing's officers, but their pleas were ignored. The respondent went into hiding despite a standing warrant for his arrest.

The complaint was referred to a Commissioner for investigation, and the respondent was declared in default for failing to comply with the orders. The Commissioner found that Wealth Marketing's executives, including the respondent, conspired to defraud the complainants by recruiting innocent investors for a non-existent foreign currency trading business. The Commissioner recommended the respondent's disbarment. The IBP Board of Governors adopted and approved the Commissioner's report and recommendation, which was also agreed upon by the Supreme Court.

ISSUES:

1. Whether or not the respondent should be disbarred for alleged acts of defraudation.

2. Whether or not the creation of two corporations, Wealth Marketing and Ur-Link, and the roles played by the respondent in these corporations constitute defraudation.

RULING:

1. The respondent should be disbarred for his alleged acts of defraudation. The Supreme Court agrees with the findings and recommendation of the Integrated Bar of the Philippines (IBP) Board of Governors. Lawyers are expected to maintain a high standard of morality, honesty, integrity, and fair dealing, and any conduct wanting in these qualities may result in disciplinary action. In this case, the respondent played a vital role in the creation of two corporations, Wealth Marketing and Ur-Link, and was found to have conspired with others to defraud investors.

PRINCIPLES:

• Lawyers are expected to maintain a high standard of morality, honesty, integrity, and fair dealing.

• Lawyers may be disciplined for any conduct that is wanting in morality, honesty, probity, and good demeanor.

• The creation of corporations and roles played by lawyers in these corporations may be considered in determining whether acts of defraudation were committed.