SEC warns public against investing in ‘Lokalplate’

The Securities and Exchange Commission (SEC) has warned the public against dealing or investing with Lokal.Plate Corporation as it has no necessary authority to solicit investments.

“The public is advised NOT TO INVEST or STOP INVESTING in any investment scheme being offered by any individual or group of persons allegedly for or on behalf of LOKAL.PLATE CORPORATION and to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of it,” the SEC said in an advisory.

The corporate regulator issued the advisory after it received information that a number of individuals or groups of persons claiming to represent “Lokalplate,” as it is known on social media,  are allegedly enticing the public to invest their money in said entity.

The SEC, citing its records, said Lokalplate has been registered as a corporation on August 7, 2020.

However, it is not authorized to solicit investments from the public “since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the SRC (Securities Regulation Code).”

The SEC said, as posted online, Lokalplate is offering investments to the public under the guise of franchising where a “franchisee” invests P12,888.00 to earn P40,000.00 to P80,000.00 per month.

“Further, a franchisee only needs to share a link, which, when clicked by anyone who wants to order from the affiliated food service provider of Lokalplate, the franchisee earns 15% to 20% of the purchase price of the ordered food. A franchisee able to recruit another prospect also earns a commission of P3,00.00 for every direct referral,” it said.

Considering that the scheme involves the sale of securities to the public in the form of investment contracts, the Securities Regulation Code (SRC) requires that these securities be duly registered and that the concerned corporation and/or its agents have appropriate registration and/or license to sell such securities to the public pursuant to Section 8 and 28 of the SRC.

GMA News Online has reached out to Lokalplate through the mobile numbers posted on its website for their comment on the matter, but no response yet has been received as of posting.

The SEC noted that Lokalplate’s primary purpose clause of its Articles of Incorporation does not include “franchising” quoted as follows:

“To engage in online selling of food, and promote, advertise such food products thru online. Provided that the corporation shall not solicit, accept or take investments/placements from the public neither shall it issue investment contracts.”

The corporate regulator warned those who act as salesmen, brokers, dealers, or agents or claim to act as such for Lokalplate in selling or convincing people to invest in the investment scheme “may be prosecuted and held criminally liable under Section 28 of the SRC and penalized with a maximum fine of P5,000,000.00 or penalty of 21 years of imprisonment or both pursuant to Section 73 of the SRC.”

“Also, 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, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of Securities and Exchange Commission vs. Oudine Santos (G.R. No. 195542, 19 March 2014),” it said.—AOL, GMA News