SEC shuts down AIQuest Trading’s unregistered offering

MANILA, Philippines —  The Securities and Exchange Commission (SEC) has ordered AIQuest Trading and its operator to stop soliciting public investments immediately, escalating its action over an alleged unregistered securities offering.

The SEC’s Enforcement and Investor Protection Department (EIPD) issued a cease and desist order (CDO) against AIQuest Trading, Erica Aguilar, and their agents after finding prima facie evidence of ongoing violations of the Securities Regulation Code (SRC).

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The order covers the entity’s officers, representatives, salespeople, agents, operators, enablers, influencers, and other persons or entities acting on its behalf. 

AIQuest Trading allegedly solicited investments through social media and its website for what it described as “AI-assisted stock trading.”

Its three investment plans promised guaranteed returns ranging from 30 percent within seven days to as much as 150 percent within 30 days. Investments could range from P500 to as much as P1 million, depending on the plan. 

Certifications obtained by the EIPD revealed that the SEC did not register AIQuest Trading as a corporation or partnership.

It also had not registered any securities, applied for a license to sell securities, or secured such a license from the corporate regulator. 

The EIPD found reasonable grounds to believe that the scheme constituted the offer and sale of unregistered securities in the form of an “investment contract.”

It said investors put money into a common enterprise with the expectation of guaranteed profits derived primarily from the efforts of others, satisfying the elements of the Howey test used to determine whether an investment contract exists. 

The SEC said the offer and sale of unregistered securities without the required license constituted a continuing violation of Sections 8, 26 and 28 of the SRC.

The regulator further found that the unauthorized investment scheme constituted financial fraud under the Financial Products and Services Consumer Protection Act. 

Under the CDO, AIQuest Trading, Aguilar, and persons acting on their behalf must immediately stop selling or offering unregistered securities. The authorities ordered them to stop their internet presence regarding the covered transactions and investment scheme.

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The SEC likewise prohibited them from transacting business involving funds in depository banks and from transferring or disposing of assets, including bank deposits, without authority from the Commission. The measure aims to protect investors’ assets.

The respondents may file a verified motion to lift the CDO within five days from receipt of the order or its posting on the SEC website, whichever comes earlier. /pai