SEC orders closure of fraudulent construction firm

AA Castro Construction and Aggregates Trading, an unlawful solicitor of investments that promise monthly returns of 30 percent to 40 percent, was slapped with cease and desist order by the Securities and Exchange Commission (SEC) for operating without the necessary licenses.

The regulator has directed the company, along with AA Castro Hauling Construction Management and Aggregates Trading OPC and its chief executive officer April Grace Calleja Castro, to stop offering and selling securities in the form of investment contracts via an order dated Aug. 30.

The order also covers the company’s representatives, salesmen, solicitors, agents, upline networkers, enablers and influencers.

At the same time, the company and its officers were “ordered to cease their internet presence relating to their investment scheme.”

“They were further prohibited from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets of the investors,” the SEC added.

The regulator found that AA Castro was holding public events and using social media sites Facebook and YouTube to attract investors to their supposed construction business for a minimum investment of P50,000.

“Payouts amounting to P4,400 to P4,700 were to be given weekly, taken from its supposed construction business that allegedly yielded P23.26 per 189 cubic meters of aggregates hauled,” SEC said, explaining the company’s investment scheme.

This scheme involved the sale and offer of securities to the public, which requires a registration statement duly filed with and approved by the SEC.

“This undoubtedly warrants the issuance of a cease and desist order because the act of AA Castro and April Castro in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” SEC said.
The regulator had issued an advisory warning the public against AA Castro last July 26.