The Securities and Exchange Commission (SEC) has in its radar yet another company illegally offering investments to the public, promising higher returns, but without securing the agency’s approval.
In an advisory dated July 4, the corporate watchdog warned the public against putting their money in Safe District Enterprise, which was offering investment packages to the public, with a P20,000 minimum investment amount, even if it did not have a license to do so.
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The company, which markets its products on social media, promises 5- to 12-percent profits released monthly within a one- to six-month lock-in period, according to the SEC.
Investment contracts
Based on the commission’s advisory, Safe District offers investment contracts through several posts on Facebook Groups.
“An ‘investment contract’ exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others, which is prominent in the scheme of Safe District Enterprise,” the SEC said.
The agency reiterated that Safe District was not a registered corporation, nor did it have the appropriate licenses to solicit investments from the public, thus violating the Securities Regulation Code.
Under the law, violators may face P5 million in fines or imprisonment of 21 years, or both.
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This is the latest in a series of warnings issued by the SEC against illegal investments.
Last month, the regulator slapped a cease and desist order against three supposed religious organizations based in Mindanao for allegedly soliciting investments in the guise of donations from the public.
Hasmadai Foundation Inc., Humanitarian and Spiritual Mission Apostulates of Davao and Asia Inc., and Humanitarian Institute of Technology Corp. were told to stop offering securities through “charity mission support pledge forms.”
The provincial government of Agusan del Sur and the SEC Butuan extension office found that the groups led by Dante Encarnacion Tabusares enticed local and foreign donors to donate a certain amount that would entitle them to a monthly “missionary allowance.”
The allowance is equivalent to 27 percent to 34 percent of their donation, with some pledging as much as P20,000.