SEC warns public vs investing in company
>> Tuesday, January 31, 2023
The Securities and Exchange Commission warned
the public in investing in another corporation.
“Based on reports and information gathered by the Commission, FDMS Business and Marketing Solutions Inc. by Frederick Bahalla Sabater, Marlon Salvador Adriano, Mylene Balayan Cureg, Daniel Dela Cruz Sta. Rita and Ronaldo Dizon Villena have been soliciting investments without the necessary license or authority from the Commission.
The SEC said FDMS Business and Marketing Solution Inc. under its so-called Affiliate Learning Program, is offering investment plans through its Ride Trade Investment packages, namely: Pre-Subscription, Basic Subscription and Pro-Subscription, respectively, with a minimum investment of P3,000.00 up to a maximum of P1,000,000 with promised earnings ranging from 30% up to 50% per month (P900 up to P500,000) or up to 150%-250% in five months (P400,000 up to P2,500,000).
Aside from the guaranteed returns. FDMS reported is also offering additional incentives for recruiting members as follows: The aforementioned investment scheme of FDMS clearly involves offering and sale of securities in the form of “investment contract” as defined under Section 3.1 of the Securities Regulation Code. In this regard, the public is made aware that an “investment contract,” which is a form of a security, exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others which is prominent in the scheme of FDMS.
The Securities Regulation Code (SRC) requires that said offer and sale of securities must be duly registered with the Commission and that the concerned entity and/or its agents should have the appropriate registration and/or license to sell such securities to the public.
Records of the Commission showed FDMS was registered with the Commission on March 15, 2021.
However, such registration reportedly merely grants juridical personality to the corporation but does not authorize it to issue, sell or offer for sale securities to the public nor undertake business activities requiring a secondary license. Further, per records of the Commission, FDMS is not authorized to solicit investments from the public as this entity did not secure prior registration and/or license to solicit investment from the Commission as prescribed under Sections 8 and 12 of the Securities Regulation Code. In fact, FDMS’s primary purpose per its Article of Incorporation is, as follows: In addition, the scheme employed by FDMS has the characteristics of a “Ponzi Scheme” where monies from new investors are used in paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent members in case of scarcity of new investors.
The SEC said offering and selling of securities in the form of investment contracts using the “Ponzi Scheme” which is fraudulent and unsustainable, is not a registrable security.
“The Commission will not issue a License to Sell Securities to the Public to persons or entities that are engaged in this business or scheme.
The SEC said it does not allow the registration of Foreign Exchange (FOREX) in the nature of Commodity/Financial Futures Contract, Contracts for Difference (CFDs) and other similar highly-volatile and risky derivatives nor their merchants/brokers, as the public trading thereof and pertinent rules governing these securities, remain suspended pursuant to Rule 11 of the 2015 Implementing Rules and Regulation (IRR) of the SRC. In other words, since the Commission has not yet registered a commodity futures exchange, it follows that no commodity futures merchant shall likewise be registered and allowed to solicit investments in commodity futures contracts, otherwise known as leveraged foreign currency contracts or margin trading,” the SEC said.
The Commission also previously issued on 27 July 2018, an advisory regarding “Free training seminars for foreign-registered electronic trading platforms used as fronts of illegal offering and/or selling of unregistered securities with the prospect of learning successful strategies in investing and profiting from the above-stated securities using various electronic investment platforms.
These electronic platforms are allegedly foreign-registered and are accessible anywhere in the Philippines through the internet. In view thereof, the public is hereby advised to stop in the investment scheme being offered by FDMS and its representatives.
Those who act as salesmen, brokers, dealers or agents, representatives, promoters, uplines, influencers, endorsers, abetters and enablers of FDMS in soliciting or convincing people to invest in the investment scheme being offered by the said entity including soliciting investments or recruiting investors through the internet may be held criminally liable under Section 28 of the SRC and penalized with a maximum fine of P5,000,000 or imprisonment of 21 years or both pursuant to Section 73 of the SRC (SEC vs. Oudine Santos, G.R. No. 195542, 19 March 2014). Furthermore, the names of all those involved will be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be correspondingly assessed.
“Based on reports and information gathered by the Commission, FDMS Business and Marketing Solutions Inc. by Frederick Bahalla Sabater, Marlon Salvador Adriano, Mylene Balayan Cureg, Daniel Dela Cruz Sta. Rita and Ronaldo Dizon Villena have been soliciting investments without the necessary license or authority from the Commission.
The SEC said FDMS Business and Marketing Solution Inc. under its so-called Affiliate Learning Program, is offering investment plans through its Ride Trade Investment packages, namely: Pre-Subscription, Basic Subscription and Pro-Subscription, respectively, with a minimum investment of P3,000.00 up to a maximum of P1,000,000 with promised earnings ranging from 30% up to 50% per month (P900 up to P500,000) or up to 150%-250% in five months (P400,000 up to P2,500,000).
Aside from the guaranteed returns. FDMS reported is also offering additional incentives for recruiting members as follows: The aforementioned investment scheme of FDMS clearly involves offering and sale of securities in the form of “investment contract” as defined under Section 3.1 of the Securities Regulation Code. In this regard, the public is made aware that an “investment contract,” which is a form of a security, exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others which is prominent in the scheme of FDMS.
The Securities Regulation Code (SRC) requires that said offer and sale of securities must be duly registered with the Commission and that the concerned entity and/or its agents should have the appropriate registration and/or license to sell such securities to the public.
Records of the Commission showed FDMS was registered with the Commission on March 15, 2021.
However, such registration reportedly merely grants juridical personality to the corporation but does not authorize it to issue, sell or offer for sale securities to the public nor undertake business activities requiring a secondary license. Further, per records of the Commission, FDMS is not authorized to solicit investments from the public as this entity did not secure prior registration and/or license to solicit investment from the Commission as prescribed under Sections 8 and 12 of the Securities Regulation Code. In fact, FDMS’s primary purpose per its Article of Incorporation is, as follows: In addition, the scheme employed by FDMS has the characteristics of a “Ponzi Scheme” where monies from new investors are used in paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent members in case of scarcity of new investors.
The SEC said offering and selling of securities in the form of investment contracts using the “Ponzi Scheme” which is fraudulent and unsustainable, is not a registrable security.
“The Commission will not issue a License to Sell Securities to the Public to persons or entities that are engaged in this business or scheme.
The SEC said it does not allow the registration of Foreign Exchange (FOREX) in the nature of Commodity/Financial Futures Contract, Contracts for Difference (CFDs) and other similar highly-volatile and risky derivatives nor their merchants/brokers, as the public trading thereof and pertinent rules governing these securities, remain suspended pursuant to Rule 11 of the 2015 Implementing Rules and Regulation (IRR) of the SRC. In other words, since the Commission has not yet registered a commodity futures exchange, it follows that no commodity futures merchant shall likewise be registered and allowed to solicit investments in commodity futures contracts, otherwise known as leveraged foreign currency contracts or margin trading,” the SEC said.
The Commission also previously issued on 27 July 2018, an advisory regarding “Free training seminars for foreign-registered electronic trading platforms used as fronts of illegal offering and/or selling of unregistered securities with the prospect of learning successful strategies in investing and profiting from the above-stated securities using various electronic investment platforms.
These electronic platforms are allegedly foreign-registered and are accessible anywhere in the Philippines through the internet. In view thereof, the public is hereby advised to stop in the investment scheme being offered by FDMS and its representatives.
Those who act as salesmen, brokers, dealers or agents, representatives, promoters, uplines, influencers, endorsers, abetters and enablers of FDMS in soliciting or convincing people to invest in the investment scheme being offered by the said entity including soliciting investments or recruiting investors through the internet may be held criminally liable under Section 28 of the SRC and penalized with a maximum fine of P5,000,000 or imprisonment of 21 years or both pursuant to Section 73 of the SRC (SEC vs. Oudine Santos, G.R. No. 195542, 19 March 2014). Furthermore, the names of all those involved will be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be correspondingly assessed.
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