SEC Advisory – Investor Alert

Since September of last year, the local, national and international news reports have been reporting incidents of violence in southern Philippine provinces where a reported 12 billion peso ($290 million) allegedly a “Ponzi scheme” that may have duped over 10,000 people. What is interesting to note is that the Securities and Exchange Commission (SEC) has been vigilant in sending out a Notice to the Public or an Investor Alert since August 2012 to warn the public about the existence of these companies or entities that has the tell-tale trademark of a possible investment scam or commonly called a “Ponzi scheme”.

Now just last week alone, in a statement released by SEC, they said they received another information that a group of persons, company or firm operating in the city of Imus, Cavite is offering investment opportunities to the public, promising substantial income in return for a capital investment ranging from Three Thousand Pesos (P3,000.00) to One Million Two Hundred Thousand Pesos (P1,200,000.00).

The SEC said investors are promised to be paid Five Thousand Pesos (P5,000.00) over and over again, for every four (4) associates or “cycle” created in a so-called “entry line.” They are also offered various investment packages with profit sharing income ranging from four percent (4%) to eight percent (8%) per month based on capital invested.

The SEC is urging the public to be more cautious in their investments and report any encounters of the scam it to them for proper action. They may also inquire with the SEC Corporation Finance Department at telephone numbers 584-61-03 or 584-5950. Furthermore, the public is also encouraged to report if one is privy or being approached with this type of scam, please go to SEC’s website at www.sec.gov.ph or they can report the matter, thru telephone call to: Enforcement and Prosecution Department (EPD) at tel. No. (632) 584-7650 or write to Securities and Exchange Commission, 5th Floor, SEC Building, EDSA, Mandaluyong City or email them at [email protected].

Again as a rule of thumb, whether you are just evaluating an investment offer, have the suspicion about an investment already made, or you simply want more information, the SEC, as a government regulatory agency have the proper consumer protection department to help you with. The SEC regulates and supervises companies involved in the distribution and selling of instruments called "securities". As such, these should be registered with the SEC. 

If you are offered such a scheme, check with the SEC right away to see if the company is duly registered or registered to broker or deal securities and if the company is registered to sell investment contracts. Furthermore, it is also important to know if the said company is engaging in commodity futures contracts despite a prohibition by the SEC and/or engaging in activities that are "off tangent” with the company’s primary purpose. Meaning, the company is inviting, enticing and accepting investments while their SEC paper shows that their primary purpose is of a general trading company.

Kudos to the Cebu Chamber of Commerce and Industry (CCCI) for forwarding the latest SEC Advisory to its members as well.

For comments, rejoinders and questions related to credit & collection, email at [email protected]