SEC issues CDO order vs D 1st Cell Pawnshop

The Securities and Exchange Commission (SEC) has issued an order preventing D 1st Cell Pawnshop Inc. from further soliciting investments from the public.

The issuance of a cease-and-desist order against D 1st Cell Pawnshop followed an investigation conducted by the SEC’s Compliance and Enforcement Department which showed that the company sold securities to the public without prior registration and approval of the corporate watchdog agency.

D 1st Cell Pawnshop was found to have offered investment contracts to the public with the promise of a monthly interest of at least four percent on a minimum investment of P50,000 for a period of four months, six months or one year.

The company, in turn, would issue four post-dated checks, three of which representing the corresponding interest while the 4th check representing the full amount of the capital investment.

If the amount of investment is P300,000 or more, the investor may, at his option, insure the same with the South Sea Surety Bond by paying the premium directly to the company or allow D 1st Cell Pawnshop to pay the same and deduct the premium from the interest due the investor.

Investors were told that proceeds from the sale of investment contracts would be used as additional capital to pay for the pawned cellphones and open new branches nationwide.

D 1st Cell PawnShop currently has 38 branches throughout the country excluding its headquarters in Granada, Quezon City.

According to the CED, D 1st Cell Pawnshop’s primary business is limited to loaning money upon the security of a personal property such as jewelry, precious stones and other personal property.

Listed as directors of the company are Bryan Chu So, Eugene Co, Jeffrey Ibanez, Janice Obra and Kenneth Ibanez.

CED is seeking the revocation of D 1st Cell Pawnshop’s certificate of registration for violation of the Securities Regulation Code which requires prior registration of securities before they are sold to the public.

According to its website, D 1st Cell Pawnshop is the first cellular pawnshop in the country offering high appraisal values and low interest rates on pawned cellphones.

The company started in 2002 with its first branch in Tandang Sora, Novaliches.