8 more firms flagged for Ponzi-like schemes

Artemio Dumlao - The Philippine Star
8 more firms flagged for Ponzi-like schemes
This undated file photo shows a building of the Securities and Exchange Commission.
Businessworld / SEC.GOV.PH

BAGUIO CITY, Philippines — For operating like Ponzi schemes, eight more entities were flagged yesterday by the Securities and Exchange Commission (SEC), as the state regulatory body advised the public against dealing with them, especially giving in to their solicitations for investments.

The following are not authorized to solicit investments because they lack necessary licenses, according to SEC-Baguio City: House of Forex / H. Flores Business Consultancy Services; Foto Trading International; HarvestCTMall; Crypace Limited/Crypace Financial Consultancy Services; DNKC Corp.; Gainz Philippines; S&M ventures and Salon de Alexis.

As early as November last year, the SEC warned the public about the investment offerings of House of Forex/H. Flores Business Consultancy Services as it reportedly offers seven ways to earn, each with high interest earnings.

The SEC explained that an “investment contract,” which is a kind of security, exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived primarily from the efforts of others, which is prominent in the scheme of House of Forex/H. Flores Business Consultancy Services.

The Securities Regulatory Code (SRC) requires that securities must first be registered with the SEC before they can be offered and/or sold to the public, and the concerned entity and/or its agents should have the appropriate registration and/or license to offer and/or sell such securities to the public.

The House of Forex and the H. Flores Business Consultancy Services are not registered with SEC as a corporation or a partnership, thus its actions of offering unregistered securities to the public in the form of an investment contract is considered fraudulent and in violation of Sections 8, 26 and 28 of the SRC.

The seven other entities that were flagged yesterday resemble a pyramid/Ponzi scheme, where investors earn through recruitment fees instead of the sale of actual products/services, and investors are paid using the contribution of new members, according to the SEC.

Earlier this week, a number of firms were again named by the state regulatory body to have been engaging in Ponzi schemes victimizing the public, as it vowed that it “remains unwavering in its efforts to stamp out illegal investment-taking activities through financial literacy campaigns and advisories to the public.”

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