MANILA -The Securities and Exchange Commission (SEC) issued a shutdown order against Platinum Coin Pawnshop for operating an illegal investment scheme.
The cease and desist order against the company was issued on April 4. It was also barred from doing business transactions using money at its depository banks and from transferring related assets belonging to investors.
The order covers Platinum Coin’s operators, directors, officers, representatives, salesmen and agents, the SEC said.
According to the SEC, Platinum Coin ran an illegal investment scam under the guise of a legitimate lending business in Dipolog City, Zamboanga del Norte.
Instead, the regulator’s Enforcement and Investor Protection Department found that the company was luring unwitting victims with investment packages guaranteeing profits of 15 percent to as much as 50 percent within 30 days. Platinum Coin then executes an agreement with its investors and issues post-dated checks.
Investors were also promised an annual bonus of 20 percent of their investment, plus a 5-percent commission for new recruits.
“The scheme involves the sale and offer of securities to the public in the form of investment contracts, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC,” it noted.
Such investments cannot be sold without a registration statement duly filed with and approved by the SEC. It said the post-dated checks issued by Platinum Coins were also illegal.
“The Commission thus finds and so holds that the post-dated checks were issued to its investors in lieu of shares or interest in Platinum Coin in an attempt to circumvent the law. The post-dated checks represent the investor’s ownership interest in the lending business of Platinum Coin with an expectation of profits to be derived therefrom,” the order read.
It added that Platinum Coin was not registered with the SEC, either as a corporation or partnership.
“[The] Commission cannot overemphasize the fact borne by the records that Platinum Coin’s act of selling/offering unregistered securities in the form of investment contract constitutes fraud, which should be promptly restrained for the protection of the investing public,” the Commission En Banc added.