SEC issues cease-and-desist order against mining corp

MANILA, Philippines–The Securities and Exchange Commission (SEC) has issued a cease-and-desist order against Alabel Maasim Mining (ALMAMICO) Corp. and related cooperatives for soliciting investments from the public without the necessary license and in a manner resembling a “Ponzi” scheme.

Citing “substantial evidence” gathered by its Enforcement and Investor Protection Department (EIPD), the SEC said ALMAMICO and affiliates Alabel Maasim Small Scale Mining Cooperative and/or Alabel-Maasim Credit Cooperative (ALAMCCO) have been soliciting investments from the public without the necessary license.

The group was also found out to be employing the Ponzi scheme, an investment fraud that lures investors with promises of high financial returns or dividends. In such a scheme, the payment of purported returns to existing investors comes from funds contributed by new investors. The bulk of the investment typically remains with the proponent or operator.

ALAMCCO and ALMAMICO operate largely in Saranggani, General Santos City and Koronadal City. They invite members to invest certain amounts in exchange for a guaranteed 35 percent monthly return, which is supposedly compounded when investors lock in their investments for a year.

According to the SEC, the scheme satisfies the elements of an investment contract, as follows: 1) There is a placement of money. 2) The money invested is placed in a common enterprise. 3) There is an expectation of profits. 4) The expected profits are generated from the entrepreneurial and managerial efforts of others.

The SEC also found out that ALAMCCO and ALMAMICO have engaged in a public offering of securities when they indiscriminately or randomly promoted their investment schemes through videos posted online.

ALMAMICO and ALAMCCO were further ordered to cease from promoting its investment scheme through the internet.  They were ordered to delete immediately the promotional presentation of such investment scheme form the websites.

Moreover, the SEC en banc enjoined ALMAMICO and ALAMCCO from transacting business involving the funds in their depository banks, and from transferring, disposing or conveying in any other manner all related assets to preserve them for the benefit of the investors. (Editor: Jonathan P. Vicente)