SEC padlocks 2 firms hawking ‘fraudulent’ investments
The Securities and Exchange Commission (SEC) has issued an order to padlock Fast Track Worldwide Inc. and JOCALS688 Beauty and Wellness Products Trading Inc., two entities flagged for fraudulent investment schemes.
In separate orders issued on May 28, the SEC ordered Fast Track and JOCALS688 to immediately cease and desist, under pain of contempt, from soliciting investments from the public or engaging in similar activities.
Fast Track and JOCALS688 were likewise barred from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying in any manner all related assets to forestall grave damage and prejudice to all concerned and to ensure the preservation of the assets for the benefit of the investors.
According to the SEC, Fast Track and JOCALS688 have engaged in the sale and/or offering of securities in the form of investment contracts without prior registration and the corresponding permit. These acts were in violation of Section 8 of Republic Act No. 8799, or The Securities Regulation Code, which prohibits the sale, offering or distribution within the Philippines of securities without a registration statement duly filed with and approved by the SEC.
Fast Track was incorporated by Rey Aldwin Bautista Valeriano, James Rhyan Espinosa Guillera, Clive Christopher Cortez Llora, Jeneil Santos Aguilar, and Jay Piscadero Gregorio in 2019 primarily “to engage in direct selling of goods and merchandises to consumers.”
The certificate of incorporation issued to Fast Track expressly prohibited it from soliciting, accepting or taking investments from the public or issuing investment contracts. However, evidence gathered by the SEC Enforcement and Investor Protection Department (EIPD) showed that Fast Track offered investment packages bundled with health, lifestyle, and nutrition products for P1,499 to P49,999.
Investors were guaranteed with returns as much as P3 million a year, as well as commissions and bonuses when they recruit more people to invest in the company.
The scheme constituted the sale and/or offer of securities in the form of investment contracts, whereby a person invests money in a common enterprise and is led to expect profits primarily from the efforts of others, the SEC said.
JOCALS688 was registered as a corporation in 2019 to engage in the sale, distribution, marketing and trading of goods, commodities and merchandise such as beauty and wellness products, coffee, juice and herbal products.The company, which is headquartered in Zamboanga del Sur, named Joshua Calderon, Echochen Calderon, Noemie Ponce, Hanz Paler and Nino Agad-ad as directors in its articles of incorporation.
The EIPD found that JOCALS688 – without secondary license to offer securities – enticed members to deposit a minimum of P10,000 to earn P13,000 after a month. Alternatively, one could become a member by purchasing a package of products for P3,800.
The SEC also pointed out that the capitalization of JOCALS688 only amounted to P1 million while it promised investors a guaranteed 37 percent monthly income.
“Clearly, JOCALS688’s business model and capitalization cannot sustain the promised returns of investment, especially if no new investors will come in,” it noted.
“Pay-outs for investors are financed from investments of new recruits/ investors. This is a fraudulent scheme which will likely cause grave or irreparable injury or prejudice to the investing public.”
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