MANILA, Philippines — The Securities and Exchange Commission (SEC) has scored another victory against an erring company after the Court of Appeals (CA) has upheld the cease and desist order issued by the commission against AlphanetWorld Corp.
Doing business under the name and style of NWorld, AlphanetWorld was found soliciting investments from the public without the necessary license.
In February 2022, the SEC issued a cease and desist order against NWorld, directing the company and its directors, stockholders, agents and all persons acting on their behalf to immediately stop from soliciting investments without the commission’s approval.
The commission issued a resolution in July of the same year which denied the motion filed by NWorld to lift the order for lack of merit, making the cease and desist order permanent.
The corporate registration of NWorld was also cancelled by the SEC for employing fraud in the procurement of its certificate of incorporation, citing its submission of an invalid tax identification number in its articles of incorporation.
In a decision promulgated on Dec. 27, the CA 8th Division held that the SEC provided NWorld with due process in issuing the cease and desist order and the company was involved in offering investments to the public without registration and necessary licenses from the commission.
“Undoubtedly, (NWorld’s) business operation or scheme constitutes an investment contract that is a security under Republic Act 8799. Hence, it must be registered with SEC before its sale or offer for sale or distribution in order to protect the investing public from fraudulent securities,” the CA said.
“The strict regulation of securities is founded on the premise that the capital markets depend on the investing public’s level of confidence in the system. As (NWorld) failed to register the same, its offering or sale to the public was rightfully enjoined by SEC,” it said.
The CA ruled that the SEC was able to observe due process when it issued the cease and desist order against NWorld, noting that informing the company of the result of its investigation is sufficient.
NWorld was also given a reasonable opportunity to file a motion to lift the cease and desist and motion for reconsideration, according to the CA.
Investigation of the SEC’s Enforcement and Investor Protection Department previously found that NWorld was involved in the selling of investment packages ranging from P4,750 to P19,000, with a guaranteed return of up to P127,000 per month.
The SEC said that investors were allegedly entitled to bonuses such as discounted rates for every purchase of investment packages, referral bonus, sales match bonus and potential earning of P25,000 under NWorld’s “XX Cash” program whenever they meet the required pairs of recruits.