SEC stops firm illegally soliciting funds from public

MANILA, Philippines — The Securities and Exchange Commission (SEC) has shut down Wellcons Unlimited Systems Inc.’s investment offerings to the public.

According to the SEC, Wellcons’ investment package is fraudulent and is likely to cause grave or irreparable injury or prejudice to the investing public.

“We hold that the act of Wellcons in selling or offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the SEC said.

While Wellcons is a duly registered corporation, it does not have the necessary license to offer investments, the SEC said.

In an order dated June 23, the SEC en banc directed Wellcons to immediately cease and desist from selling securities until it has filed the requisite registration statement and secured the necessary approval from the regulator.

The SEC issued the cease and desist order after its Enforcement and Investor Protection Department found that Wellcons has been offering investment packages worth P2,500 to P13,890 under a so-called Binary System, with guaranteed returns of up to P9,000 to P32,000 per day.

According to the SEC, Wellcons’ scheme involves the sale and offer of securities to the public in the form of investment contracts.

Under this arrangement, a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.

Wellcon’s Pangkabuhayan Program supposedly offers double their money packages within six months based on investment packages worth P1,500 to P5,000.

“(T)he Commission finds that Wellcons is engaged in the unauthorized sale and/or offer of securities in the form of investment contracts in violation of Section 8 of the [Securities Regulation Code (SRC) because it has no license to carry out the same,” the SEC said.

Citing Section 8 of Republic Act 8799 or the Securities Regulation Code, the SEC said securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.

“(I)t is clear that Wellcons’ business model which promises high return of investments is not sustainable, and can only be carried out as long as new investors continue to come in,” the commission en banc said.