SEC warns of more Ponzi schemes, investment scams

MANILA, Philippines — Ponzi schemes and other similar investment scams are growing, the Securities and Exchange Commission (SEC) said over the weekend, as it warned the public against putting their money in such schemes with unusually high returns.

The SEC continues to crackdown on investment scams, recently nabbing 12 people caught soliciting investments from the public without the necessary license.

The 12, who are working for two separate companies, are in the custody of the National Bureau of Investigation (NBI) and are awaiting prosecutorial proceedings.

SEC chairman Emilio Aquino said the agency remains firm in its commitment to clamp down on fraudsters.

Aquino warned the public to be careful and to park their funds only in licensed securities sellers.

“We reiterate our advice to the public to exercise caution and discernment when offered an investment opportunity,” Aquino said.

Last month, the SEC’s Enforcement and Investor Protection Department (EIPD), along with the NBI, conducted entrapment operations at the offices of SGP Dragon Trading Corp. and Requiza Poultry in Sacred Heart, Quezon City.

As a result, six people connected with SGP Dragon and six working for Requiza Poultry were arrested for violation of Republic Act 8799, or the Securities Regulation Code.

Prior to this, the SEC issued an advisory against SGP Dragon for enticing the public to avail of purported foreign exchange market products for a minimum investment of P1,000 in exchange for earnings ranging from one percent to 2.5 percent per day.

In its advisory, the SEC said SGP is not authorized to offer, solicit, sell or distribute any investment contracts and other forms of securities.

Another company flagged by the SEC is Requiza Poultry, also known as Requiza Farm and Requiza Agricultural Trading, which is engaged in mining and quarrying activities.

According to the SEC, Requiza Poultry offers an investment opportunity with a guaranteed 50 percent return. An investor may purchase a minimum of 35 chicks for P3,500 and simply wait for 60 days to earn back the amount plus a 50 percent profit.

However, the SEC said Requiza Poultry is not registered with the SEC either as a corporation or as a partnership and is also not authorized to solicit investments from the public.

Aquino reiterated that Section 26 of the Securities Regulation Code prohibits fraudulent transactions, including Ponzi schemes where investors are lured with impossibly high returns and paid using the money contributed by other investors.

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 may be prosecuted and held criminally liable, and may also face a maximum fine of P5 million or imprisonment of 21 years or both, pursuant to Section 73 of the law.