SEC warns against Salon de Pamplona

MANILA, Philippines — The Securities and Exchange Commission (SEC) has warned  the public against investing in Iloilo-based Salon de Pamplona.

The salon was found to be offering investment slots worth P5,000 to P300,000, in exchange for a promised return of 15 percent after 30 days.

Proceeds from the investments will supposedly fund the expansion of its salon branches.

In a Dec. 20 advisory, however, the SEC said that Salon de Pamplona is not registered as a corporation and neither is it authorized to sell or offer securities to the public in the Philippines, pursuant to Republic Act 8799 or The Securities Regulation Code (SRC).

The SRC provides that entities seeking to engage in the business of buying or selling securities or as a broker dealer, or seeking to create or operate an exchange for the buying and selling of securities, must secure a secondary license with the SEC.

“(T)he investment scheme of Salon de Pamplona has the characteristics of a ‘Ponzi Scheme,’ promising exorbitant rates of return with little to no risk at all to the investors... The Commission will not issue a license to offer or sell securities to the public, to persons or entities engaged in such business or scheme,” the SEC said.

The SEC also noted that Republic Act 11765 or the Financial Products and Services Consumer Protection Act, prohibits investment fraud, which is defined under the law as any form of deceptive solicitation of investments from the public, including Ponzi schemes.

Those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of Salon de Pamplona in selling or convincing people to invest in its platform within the Philippines, even through online means, may be held criminally liable under Section 28 of the SRC and may  be penalized up to P5 million or suffer imprisonment of up to 21 years, or both.

Previously, the SEC issued an advisory against Salon de Alexis, another Iloilo-based salon, for employing a similar investment scheme.