Permanent CDO issued to CROWD1 Asia Pacific

MANILA, Philippines – The Securities and Exchange Commission (SEC) has issued a permanent cease and desist order on CROWD1 Asia Pacific Inc.

With the order, the entity can no longer solicit and accept investments from the public under a scheme disguised as a digital marketing business.

In a resolution issued on July 2, the SEC denied the motion to lift cease and desist order ad cautelam filed by CROWD1 for lack of merit and thereby declared the cease and desist order permanent.

“A careful review of the Motion to Lift will show that except for its general denials, CROWD1 failed to present any evidence in support of its claim that it is not engaged in the sale and/or offer for sale of securities in the form of investment contracts,” the resolution read.

Last May 12, the SEC issued a cease and desist order against CROWD1 after finding that the entity has operated “a fraudulent investment scheme consisting of the sale and offer of inexistent securities in the form of investment contracts to the public.”

Based on the SEC’s investigation, CROWD1 has solicited and accepted investments from the public by offering what it describes as educational packages for a minimum of P6,000 and as much as P240,000.

Furthermore, the SEC said, CROWD1 represents itself as a digital marketing business, claiming that it generates income from online games.

However, the SEC ruled that CROWD1’s scheme involved the sale and offer of securities in the form of investment contracts and, thus, required a secondary license under Republic Act 8799, or The Securities Regulation Code (SRC), which CROWD1 does not have.

CROWD1 is only registered as a corporation for the primary purpose of engaging in business process outsourcing services.

Accordingly, the SEC directed CROWD1 to cease and desist, under pain of contempt, from engaging in activities of selling and offering for sale securities in the form of investment contracts or other similar schemes without prior registration and permit to sell.

The SEC also ordered CROWD1 to cease from promoting its investment scheme on social media and other online platforms.

“The cease and desist order covers the corporation’s operators, partners, directors, officers, salespersons, agents, representatives, promoters, and all persons, conduit entities and subsidiaries claiming and acting for and on its behalf,” the SEC said.