SEC warns public vs illegal crowdfunding schemes

The Securities and Exchange Commission (SEC) has warned the public against individuals and groups hawking illegal crowdfunding activities or investments disguised as cryptocurrency trading and franchising.

In separate advisories issued on Feb. 9, the SEC advised the public to exercise caution when dealing with Jams Mart, Solmax Global Limited and Igniter 100, as well as BitAccelerate.

All three have no license to offer securities in the Philippines.

Meanwhile, the SEC has revoked the certificate of incorporation of Chiyuto Creative Wealth Documentation Facilitation Services for operating an unauthorized investment program resembling a Ponzi scheme, or one that relies on the contributions of more investors to pay off the returns of earlier-stage members, rather than from the actual sale of products or services from a legitimate business.

The SEC Enforcement and Investor Protection Department (EIPD) also slapped penalties totaling P9 million against Chiyuto and its single stockholder, Patrocenio Calvez Chiyuto Jr., for administrative violations of Republic Act No. 8799, or the Securities Regulation Code.

Chiyuto was also permanently disqualified from being a director of other corporations.

The EIPD earlier issued a cease-and-desist order to Chiyuto after discovering that the latter has been offering and selling securities to the public through a double-your-money roulette game without the necessary license. This is considered an ultra vires act, prohibited under Section 44 of the Revised Corporation Code of the Philippines.

In the case of Jams Mart, which is headed by a certain Niño Luis Jamili, this is not registered with the SEC either as a corporation or as a partnership. It has been offering investments to the public through its franchise investment program, where investors are promised up to 300 percent or returns within one year.

Solmax Global and Igniter 100, meanwhile, have been enticing the public to invest in its initial coin offering (ICO) through its Filipino independent marketing partners (IMPs). Supposedly based in London, Solmax and Igniter 100 are operated by Florian Krueger, Serge Meulenbelt, Abdul Rehman Sandhu, Steven Lubka, Thelma Dhlovu, Aarron Bates and Asim Mirza.

The SEC identified the IMPs as Anna Lisa, Diane Sawali, Roberto Dulin, Aizel Alana, Ehmerson Ilagan, Jennifer Plata, Meri Reyes, Elphed Reyes Stephen Carreon, Renmar Sombilon, Jemar Tarsita, Melchor Parojinog, Reynald Atillo, Fatima Atillo, Marilou Van Meeteren, Michelle Canay, Robinson Diaz, Ferzael Ebueng, Susan Borja Ramos and Jimbert Aton.

The groups’ ICO supposedly involves their cryptocurrency called “Equity Token,” or “i100,” valued at 0.38 pounds per token/share as of November 2020, with expectations that the price would drastically increase once listed in the open market this year.

The investment packages range from £25 to £5,000, with a total guaranteed passive income of 1 percent per day for a total of 200 percent for 200 days. The investor could increase their returns to 2 percent per day for 100 days if one could recruit at least three more into the scheme.

The SEC warned that Solmax and Igniter 100, despite claiming legitimacy abroad, may be operating a Ponzi scheme. Furthermore, both entities have not secured a license from the SEC to conduct its ICO within the Philippines. They are neither included among the registered banks, exchanges, or companies engaged in digital assets with the Bangko Sentral ng Pilipinas. INQ