SEC intensifies crackdown vs. suspected investment scams

The Securities and Exchange Commission (SEC) has intensified the crackdown on suspected investment scams following President Rodrigo Duterte’s order to shutdown Kapa-Community Ministry International Inc. and other forms of fraudulent schemes.

It has implemented a total of 24 search warrants against six entities violating the Sections 8 and 26 of the Securities Regulation Code, the commission said in a statement late Tuesday.

Section 8 of Republic Act No. 8799, or the Securities Regulation Code, provides that “securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission.”

Section 28 further states that no person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered with the SEC.

The combined teams of SEC, the National Bureau of Investigation (NBI), and Philippine National Police-Criminal Investigation and Detection Group (PNP-CIDG) searched the offices of Rigen Marketing in Tagum City, Ada Farm Agri Ventures in Mandaue, and Ever Arm Any Marketing in Tagum City on June 11, 2019.

Armed with search warrants, the authorities also searched the offices of Organico Agribusiness Ventures Corp. in Cebu City, Bohol, Tacloban City, Davao City and Butuan; as well as the Alabel-Maasim Small Scale Mining Cooperative (ALMAMICO)/ Alabel-Maasim Credit Cooperative (ALAMCCO) in Alabel, General Santos and Koronadal on June 10, 2019.

Similar operations were staged against Kapa-Community Ministry International Inc.’s offices in Alabel, General Santos City, Tagum City, Quezon City, Taytay, Nueva Vizcaya, Tacloban City, Cebu City, Bukidnon and Misamis Oriental, as well as the house of Kapa founder and president Joel A. Apolinario in General Santos City.

“The raiding teams were able to seize voluminous documents and cash together with other equipment and paraphernalia used by the scammers in enticing investors to invest their money with them despite not having the necessary license or permit from the SEC to engage in investment-taking and in the offering and/or selling of securities,” the regulator said.

Securities are shares, interest or participation of investors in an enterprise which gives rise to an expectation of profits primarily derived from the efforts of others.

“Evidence gathered by the SEC indubitably shows that the entities were actually scam operators who were offering ‘get-rich-quick’ schemes to the public who were attracted by the huge profits guaranteed to be paid for said investments,” it said.

In the case of Kapa, the SEC said it was established that it was actually selling or offering a scheme in which donations are “rewarded with blessings” amounting to a 30% return on the amount donated.

With the evidence on hand, the SEC said it will file criminal charges against the operators, owners, agents, officers and directors of the companies involved.

Amid its intensified crackdown on investment scams across the country, the commission reiterated its warning against any person acting for and in behalf of groups engaged in fraudulent activities.

“Soliciting investments from the public without the necessary license and through fraudulent means is a crime and punishable under the law,” SEC Chairperson Emilio Aquino said.

“We are intent on bringing the people behind investment scams, including their abettors, promoters and supporters, to justice,” Aquino said.

Violators could face a maximum fine of P5 million or imprisonment of 21 years or both, in line with Section 73 of the Securities Regulations Code.

Those who sell or offer securities to the public may be held criminally liable or accordingly sanctioned or penalized.

The names of all those involved will be reported to the Bureau of Internal Revenue so that the appropriate penalties and may be assessed against them, the SEC said. —Ted Cordero/VDS, GMA News