THE Securities and Exchange Commission (SEC) has revoked the registrations and the certificates of incorporation of two more entities “for serious misrepresentation as to what the corporations can do to the great prejudice of or damage to the general public.”

In an order dated Dec. 31, the SEC said it revoked the registration of MassDrop Marketing and Franchising Opc and MDM Ventures Corp. after the regulator found that the two were offering schemes “clearly in the nature of a Ponzi scheme.”

A Ponzi scheme is an investment program that promises high returns, where old investors earn from the investment of newer recruits.

“The schemes offered by MDM Ventures are exactly the same as that of MassDrop’s,” the SEC said.

The two were offering an investment program where investors may earn a monthly return of 20% for 90 days, including additional returns on the third month, for a total of a 160% profit.

The SEC noted that “a member shall only need to invest, wait and earn without having to do anything.”

MassDrop is a one-person corporation that registered with the commission in February last year under company registration number 2021020006740-02. Meanwhile, MDM Ventures listed in June 2021 under company registration number 2021060015483- 11.

The commission issued an advisory to warn the public against MassDrop in May 2021. It issued a separate advisory against MDM Ventures the following month, stating that “the investment activities of [MassDrop], headed by Edgar Joseph Tan a.k.a. Ejj Tan, is being continued under the name of [MDM Ventures].”

The entities have no secondary license authorizing them to solicit investments from the public. Their certificates of incorporation also explicitly stated that they are not authorized “to issue, sell, or offer for sale to the public, securities such as… investment contracts.”

In August, MassDrop and MDM Ventures President Mr. Tan released a statement claiming that MDM Ventures’ secondary license “is being worked on” and to apologize to its investors after experiencing a delay in payouts.

“To date, MassDrop and MDM Ventures have not secured any Permit to Offer and Sell securities nor have they pending applications for registration of securities under the SRC (Securities Regulation Code),” the SEC said in its revocation order.

The regulator also issued a show-cause order against MassDrop and MDM Ventures in September last year asking them to explain why their certificates of incorporation should now be revoked and why those involved should not face administrative sanctions and/or face criminal charges.

However, the SEC said their reply “did not address the findings detailed in the show-cause order” and they also did not provide an explanation in their defense.

“Instead, the companies had the temerity to insist that complainants against them execute affidavits and have the same furnished to them before they comply with the issued show-cause order,” the commission said. — Keren Concepcion G. Valmonte