SEC orders AlphanetWorld to stop investment scheme; firm says it’s not an investment company

The Securities and Exchange Commission (SEC) said Thursday it has ordered AlphanetWorld Corporation, operating under the trade name NWorld, to halt its investment scheme for not having the necessary license.

The company, however, maintained that it is not an investment company and is not engaged in the business of selling securities.

Citing the Commission En Banc order issued February 23, the corporate regulator said it directed AlphanetWorld “to immediately cease and desist from engaging in the unlawful or unauthorized solicitation, offer and/or sale of securities until the requisite registration statement has been duly filed with and approved by the SEC.”

According to its website, AlphanetWorld describes itself as a company engaged in the importation, exportation, marketing of premium health and beauty products using distinctive product wholesale and distribution through direct selling.

The company said it is incorporated and registered with the SEC.

However, the SEC said that while AlphanetWorld is a duly registered corporation, “it has never secured a secondary license from the commission as issuer of securities or broker dealer nor registered any securities for public offering pursuant to the SRC (Securities Regulation Code).”

“[T]he Commission holds that the act of NWorld in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the SEC said, citing its order against AlphanetWorld.

In a statement emailed to GMA News Online, AlphanetWorld stressed that it is “not in any way involved in the alleged unauthorized solicitation and sale of securities.”

The company also said it has not received or been served a copy of the cease and desist order from SEC “and we only learned about this through their web publication and other social media platforms.”

But the corporate regulator said it issued the cease and desist order after finding that AlphanetWorld has been selling and/or offering investment packages priced from P4,750 to P19,000 in exchange for NWorld products and a guaranteed monthly return of up to P127,000.

Business transactions are supposedly made through the company’s official webpage, it said.

The SEC added that member-investors could also earn discounts of up to 30% for every purchase of NWorld products, referral bonuses, and an additional P25,000 when they meet the 25 pairs of recruits.

“The scheme involves the sale and offer of securities to the public in the form of investment contracts, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others,” the SEC said.

Section 8 of Republic Act No. 8799 or the SRC, 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 SEC.

“NWorld is unlawfully engaged in the sale and/or offer of unregistered securities in the form of investment contract, because it has no license to carry out the same,” the SEC said.

AlphanetWorld president Juluis Allan Nolasco and its directors, stockholders, officers, representatives, salesmen, solicitors, agents, uplines, enablers and influencers were also ordered to cease their internet presence in connection with their investment scheme, according to the corporate regulator.

The SEC, likewise, directed the company to cease from transacting any business involving funds in its depository banks and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets for the benefit of affected investors.

AlphanetWorld, meanwhile, maintained that it is engaged in the direct selling, distribution, and retail of consumer products and is “NOT AN INVESTMENT COMPANY.”

“We are in the retail and distribution business and our product lines from cosmetics, skin care, food supplements, and pharmaceuticals have secured all the necessary FDA (Food and Drug Administration) licenses to operate and distribute as well as Certificate of Product Registration and Notification” the company said.

Complaints dismissed

AlphanetWorld added that complaints against the company for alleged violations of Section 28 of the SRC are already dismissed by the Office of the City Prosecutor, Zamboanga City.

“The Office of the City Prosecutor further stated that there were no details of the subject alleged investment for them to be considered as securities as defined under the Securities Regulation Code,” the company said.

The company added that its own code of conduct prohibits any marketing scheme or strategies that are “foreign to NWorld’s approved marketing programs, especially those that guarantee big results, great rewards, or risk-free endeavors.” — BM, GMA News