The Securities and Exchange Commission has ordered Scentko World Corp. and its parent firm Brendahl Cruz Holdings Inc. to stop what the corporate regulator deemed as illegal solicitation of investments in the guise of marketing perfume and cosmetics.
Under a “buy and earn” investment scheme, Scentkoworld entices the public to buy perfume and beauty products in exchange for “cash sales rewards” equivalent to 400 percent of the purchase price, the SEC said in a press statement on Wednesday, Oct. 2.
For instance, the member is promised a return of P20,000 in around 30 days for simply buying a package worth P5,000, without having to resell the products.
The returns depend on how soon Scentkoworld can recruit new members. Aside from the cash sales rewards, an existing member may receive a referral fee equivalent to 10 percent of the amount invested by the new member.
This buy and earn program “satisfies all the elements of an investment contract, where there is investment of money in a common enterprise with expectation of profits derived primarily from the efforts of others,” the SEC said.
Evidence gathered by the SEC Enforcement and Investor Protection Department (EIPD) showed that these entities have sold and offered for sale securities, in the form of investment contracts, to the public without license from the SEC.
The SEC also discovered that Scentkoworld misrepresented the incorporation of Brendahl to falsely claim that it secured a secondary license from the SEC. On social media, the group even claimed that Brendahl would soon buy a rural bank or could even put up its own bank./TSB