‘Quick-money, Get-rich’ schemes

‘SEC warns public against suspicious investment offers’

THE SECURITIES and Exchange Commission (SEC) has cautioned the public against investing on companies or groups promising a huge payback or interest, especially those who are unauthorized to conduct investment-solicitation activities.

In an advisory released only on May 30, the SEC has also warned of the investment scheme of ADA Farm Agri Ventures (ADA FARM) which entices the public to invest by purchasing a minimum of ten chicks worth P500 with a guaranteed profit of 80% in 60 days.

Likewise, it advised the public to exercise caution in dealing with BroilerPreneur Corporation (BroilerPRENEUR) which promises the public 100% to 1100% return of investment by buying, selling and breeding of chicks.

ADA Farm, it said, is not registered as a corporation or partnership in the SEC while BroilerPRENEUR, although registered as a stock corporation, has primary purpose which is limited only in engaging, conducting and carrying on the business of consumer services, production, buying and selling, distributing, direct selling, and online marketing at wholesale and retail of chicks, chicken and other related products.

“Both ADA Farm and BroilerPRENEUR are unauthorized to solicit investments from the public for not securing prior registration and license to offer, solicit, sell or distribute any investment/securities from the Commission,” it said in the advisory posted on its website.

It added: “Pursuant to Section 8 and 28 of the Securities and Regulation Code (SRC), where the scheme involves the sale of securities to the public, the SRC requires that the issuing person and/or entity must be a registered corporation with SEC, the said securities offered are duly registered and that the appropriate license and/or permit to sell securities to the public are issued to the corporation and/or its agents.

SEC said those who act as salesmen, brokers, dealers or agents of ADA FARM and BroilerPRENEUR in selling or convincing people to invest in the scheme, including solicitations or recruitment through the Internet, may be prosecuted and held criminally liable. And they may be penalized with a maximum fine of P5 million or maximum penalty of 21 years imprisonment or both.

It added that those who invite or recruit other people to join or invest in this venture or offer contracts or securities to the public may be held liable. “In this light, the public is advised to exercise caution in investing their money which may turn out to be fraudulent investment schemes and to take the necessary precaution in dealing with ADA FARM and BroilerPRENEUR and their representatives. The public is encouraged to report any information regarding the operation of ADA FARM and BroilerPRENEUR by calling the SEC Enforcement and Investor Protection Department at (02) 818-6337 and (02) 818-5324,” the advisory reads.

Rigen Marketing

SEC also issued an advisory against Rigen Marketing, advising the public to take caution in investing in the company online and through walk-in solicitations.

In a separate advisory, SEC said it flagged Rigen’s operations, where members of the public are enticed to invest with a promise of a guaranteed 400% return in just a month or so.

For an investment of P5,000 and a registration fee of P150, for instance, Rigen promises a P20,000 return and an investment of P50,000 and a registration fee of P1,500 could earn P200,000.

“The public is hereby advised to exercise caution in investing their money in these types of schemes which may also turn out to be fraudulent investment schemes, involving the sale of unregistered securities,” the SEC noted.

Under SRC, securities shall not be sold or offered for sale or distribution without a registration statement duly filed and approved by the Commission. Section 28 further states that no person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered with the SEC.

In this light, those acting as salesman, broker or agent of Rigen may be prosecuted and held criminally liable. They may also face a maximum fine of P5 million or imprisonment of 21 years or both, pursuant to Section 73 of the SRC. Those who sell or offer securities to the public may likewise be held criminally liable or accordingly sanctioned.

On its website, Rigen describes itself as a “new startup company base in Tagum City which aims to help the financial needs of individuals by providing a concrete system allowing ordinary people to have solid additional income.”

The company is allegedly operated by personalities who are supposedly “big players” in foreign exchange and crypto currency trading, and duly licensed in Singapore.

SEC said it has received reports that Rigen’s operations extend to Davao Oriental, Davao Occidental, Davao Del Sur, General Santos City and other neighboring cities and municipalities.

Last month, the Davao City Anti-Scam Unit issued a cease and desist order against Rigen for operating without a business permit. The public is encouraged to forward any information about Rigen’s operations to the SEC.

The SEC has flagged at least 6 new companies for allegedly engaging in unauthorized investment-taking schemes since early this year. It also issued advisories against Angel Investor Group, Inc.; Unity Wealth Marketing, also known as UWealth Premium and Unitywealth 100; ALMAMICO (Alabel-Maasim Small Scale Mining Cooperative/ ALAMCO (Alabel0Maasim Credit Cooperative); DV Boer Farm Corporation; and LDT Agro Industrial Hub Corporation/ VCM-NW Corporation.

And renewed or updated its advisories against Paysbook ECommerce System Co. Ltd.; North East Luzon Foundation, Inc.

KAPA-COMMUNITY MINISTRY INTERNATIONAL

SEC said it has already revoked the registration of Kapa-Community Ministry International, Inc. (KAPA) for “serious misrepresentation on what it can do or is doing to the prejudice and damage of the public.”

In a decision dated April 3, the SEC En Banc granted the petition of the SEC Enforcement and Investor Protection Department to revoke KAPA’s certificate of incorporation for offering and selling securities, in the form of investment contracts and in the guise of donations, without the necessary license and in a manner resembling a Ponzi scheme.

It said: “Kapa in dealing with the public is using its registration with the Commission as a religious corporation as a backdrop to solicit investments from the public knowing that it does not have the requisite registration. Such act is indicative of Kapa’s intent to deceive the public on what it can do or is doing to the damage and prejudice of the investing public.”

In its certificate of incorporation, KAPA is explicitly prohibited from undertaking business activities requiring a secondary license such as acting as broker or dealer in securities, investment house and close-end or open-end investment company.

Despite its lack of authority to offer and sell securities, KAPA recruited and encouraged members to donate any amount in exchange for a 30% monthly return for life, without having to do anything other than invest and wait for the payout.

SEC ruled that such scheme constituted the sale and offer of securities, in the form of investment contracts, and required a secondary license from the SEC. It said that Kapa misrepresented itself to the public by concealing this investment scheme in the guise of a donation to entice the public to ‘donating’ when in truth and in fact they are investing.

“It is by these acts that Kapa’s Certificate of Corporate Registration should be revoked so that it can no longer perpetrate its fraudulent and misleading acts through the privilege granted to it by the State,” SEC said, adding, such investment-taking scheme was beyond the powers granted to KAPA by law and those indicated in its articles of incorporation.

“Performing ultra vires acts especially making it appear to the public that it can perform investment taking activities in the guise of a donation constitute serious misrepresentation on what it can do or is doing to the prejudice and damage of the public,” SEC further said.

The SEC order covered the partners, officers, directors, agents, representatives and all other persons acting for and in behalf of KAPA, which also operates as KAPA Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-Co Convenience Store and General Merchandise, and KAPA Worldwide Ministry.

There was no immediate statement from all the companies stated by SEC in its advisories. (Mindanao Examiner)

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