THE Securities and Exchange Commission (SEC) has revoked the registration statement of iWATCH.PH Corp. for its unlicensed investment solicitation activities similar to a “pyramid scheme.”
The SEC released two advisories against the entity earlier this year. In April, the regulator warned that the investment program of iWATCH.PH has “the characteristics of a pyramid scheme.” The SEC released another advisory in Filipino the following month.
“iWATCH.PH’s employment of executive soaps as its products is nothing but a smokescreen to ostensibly make it appear that it is involved in selling consumer products,” the SEC said in an order of revocation dated Dec. 13.
“The fact of the matter is that it is offering the opportunity to earn profits by investing in its investor-recruitment business in the guise of selling product packages,” it added.
The SEC noted that the entity describes itself on its website as an “online business that gives Filipinos a lifetime reason to earn in 20 different ways and with multiple features, giving them no excuses to have nothing coming in to have a greater life even further.”
“The company also posted pictures of its registration from different government agencies and claimed that its operation is legitimate,” the regulator said.
Investors have to pay a membership fee of P2,188 before getting the opportunity to earn as an “iWatcher.”
The entity is luring investors to earn through its avail package, direct referral bonus, leadership bonus, salesmatch bonus, maintenance bonus, repeat direct referral bonus, and unilevel bonus, among others.
While iWATCH.PH was registered with the commission on Dec. 10, 2018 under company registration number CS201842541, it did not have the secondary license to sell or offer securities to the public.
iWATCH.PH requested the SEC to lift its advisory against the entity in April. However, the SEC’s Enforcement and Investor Protection Department (EIPD) informed the entity that it “is not inclined to favorably recommend the approval of its request to lift the advisory.”
The EIPD also required iWATCH.PH to submit the company’s audited financial statements and income tax return in the previous years, as well as copies of its contracts or agreements.
The regulator also requested a detailed explanation of how investors earn in the company’s program as well as a Food and Drug Administration certificate of approval for its products.
The SEC met with iWATCH.PH’s counsel in June, where the company’s representative discussed its marketing scheme and its business model.
In July, the SEC issued a show-cause order against iWATCH.PH and its stockholders-directors-incorporators, including Reiner Cadiz, Mark Joseph Regalario, Jerome Joseph Operio, Norman Galanza, and Rex Panganiban Regalario.
The company and the persons involved replied to the SEC’s show-cause order and denied that it is engaged in a pyramid scheme. It explained that “the customer or distributor earnings are not dependent on the number of recruits, rather, it is based on the perseverance and hard work in performing [the] avenues of earning.”
The SEC denied iWATCH.PH’s settlement offers twice. In November, the regulator denied the settlement offer as “the company has failed to raise any substantial argument that would warrant the lifting of the advisory and to accept the offer.”
BusinessWorld tried to reach out to iWATCH.PH’s main office through the number listed on its website for comment; however, the number could not be reached. Mr. Operio and Mr. Regalario have yet to respond to BusinessWorld’s request for a statement via Facebook Messenger as of press time. — Keren Concepcion G. Valmonte