THE Securities and Exchange Commission (SEC) has issued cease-and-desist orders against RGS World Marketing Corp. and PawisNgPinoy Online Investment for their respective illegal investment programs.
The commission, sitting en banc, is calling on the two entities to stop promoting their investment programs as these are not registered with the SEC. The regulator issued two separate orders dated March 1.
Investigations done by the SEC Enforcement and Investor Protection Department (EIPD), SEC Bacolod Extension Office (BacEO), and the SEC Iloilo Extension Office revealed that RGS World has been selling and/or offering compensation plans worth P1,000 to P20,000. The entity has been promising investors returns worth P3,500 to P80,000.
Investors of RGS World were also being lured with non-monetary returns like frozen goods and rice on top of bonuses, incentives, and products given after referring or recruiting more people into the scheme.
RGS World also distributes products like soap, liniment oils, rice, eggs, and other poultry products “to disguise its investment scheme as a legitimate distribution business,” the regulator said.
However, records from the Food and Drug Administration showed that the entity does not have a license to operate a distribution business.
The SEC said RGS World’s program “involves the pooling of the resources consisting of the moneys of its investors which are actually utilized to satisfy and pay the guaranteed returns of its existing investors.”
“This is the common enterprise that is being sustained by the investments received by RGS World from the public, although the same is masked by a product distribution business which, in reality, does not exist,” the commission en banc held.
Members of RGS World’s scheme do not do anything but invest and give their money to the directors, officers, agents, and promoters of RGS World to receive their returns.
“However, BacEO has already received complaints from numerous investors claiming that they have not received the profits or products promised to them,” the SEC said.
RGS World is a corporation registered with the commission. However, it did not secure a secondary license from the commission as issuer of securities or broker dealer and it also did not register any securities to be offered to the public.
On the other hand, PawisNgPinoy Online is not registered with the commission as a corporation or partnership and it also does not have a secondary license from the commission to solicit investments.
The EIPD received an inquiry last year after PawisNgPinoy Online was flaunting a certificate of filing of amendment of by-laws and an advisory issued by the commission “to make it appear that it is authorized to solicit, accept, and/or take investments from the public, allegedly for use in furtherance of its rice trading business, construction and medical supplies distribution, and real estate operations.”
However, the EIPD found that the document PawisNgPinoy Online used was originally issued to Top Frontier Investment Holdings, Inc., which was then edited to make it appear as if it was issued to the entity.
PawisNgPinoy Online was promising would-be investors of a guaranteed passive income with a 205-265% return of investment within just five days. Members can invest in packages and promos worth P2,000 to P50,000.
In its Jan. 11 advisory against PawisNgPinoy Online, the SEC said its offering “is an indication of a possible Ponzi scheme where returns to early investors are likely to be paid out from the investments of new investors and not out of the companies’ profits similar to those already flagged by the Commission as scams.” — Keren Concepcion G. Valmonte