SEC warns five firms against illegally soliciting funds

MANILA, Philippines — The Securities and Exchange Commission (SEC) has issued warnings against five companies that have reportedly been illegally soliciting investments from the public via the sale of securities, including cryptocurrency.

In separate advisories, the corporate watchdog told the public not to invest or participate in any schemes offered by Etoro, XM, Sandalwood Capitals Financial Advisory Service, Ate Anna’s Retail and Wholesale Online Shop and SparkFX Bitcore, as these were not registered with the commission.

The companies were found to have violated the Securities Regulation Code (SRC) that protects investors from scammers.

According to the SEC, securities being offered to the public must be registered with the commission. Companies are likewise required to provide “detailed information” about the securities, including the issuance price and use of proceeds.

READ: Protection against investment fraud

Under the SRC, the maximum penalty for offering and selling securities without the proper license is P5 million pesos. They may also face imprisonment of up to 21 years.Both Etoro and SparkFX Bitcore offer a cryptocurrency exchange that allegedly supports around 30 cryptocurrencies.

Penalty, imprisonment

SparkFX Bitcore, for instance, offers various trading plans that require an investment of up to $1,000 to earn a profit of $10,000.

Ate Anna’s Retail and Wholesale Online Shop, meanwhile, was found to have been enticing investors to spend up to P100,000 to earn P170,000 in 30 days.

Sandalwood Capitals is also offering investment plans, claiming that investors could earn up to 188 percent of their investments in 48 days. An investor is also urged to recruit more members to earn an 8-percent commission based on the investment amount of those whom they recruited.

At the same time, XM offers more than 1,000 trading instruments, as well as crypto trading, promising bonuses of up to $10,500. It is said to be launching promotional campaigns on different social media platforms to convince the public to avail of their trading services via its online platform.

The SEC noted that these scams were similar to Ponzi schemes where investments are used to pay fake profits to prior investors.

“Those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public may incur criminal liability,” the regulator said.