THE Securities and Exchange Commission (SEC) is revoking the registration of Togachat Academy Philippines, Inc. after finding it is operating an illegal investment scheme.

A Jan. 23 order has been posted on the SEC website this week saying it is cancelling the certificate of incorporation of Togachat for violation of several provisions of the Revised Corporation Code, the Securities Regulation Code and the SEC Reorganization Act.

These rules require that companies obtain a secondary license in order to sell securities, and that these securities be registered with the SEC before any sale. A company that operates beyond the authority it is granted by the SEC and deliberately misrepresents itself to the public may earn corresponding penalties.

As for Togachat, the SEC decided to revoke its certification of incorporation and put a “revoked” status on the company’s name in the commission’s online database.

The SEC said it received several messages from the public that Togachat is luring investors to participate in a multi-level marketing scheme. It asks “agents” to invest around $100 to $3,000 (about P5,000 to P152,295) convertible to “Toga Points,” which can be used to buy shares in its own trading platform. Buying at least 100 shares is supposed to guarantee an investor a return of up to $820,000 (about P41.62 million) once the company lists in the Nasdaq Stock Market in 2019.

The SEC said Togachat does not have a secondary permit authorizing it to sell securities, and neither does it have a pending registration for any of the securities it sells.

The regulator has also since found that the United States SEC have two orders on its website involving Togachat: the first saying Toga Capital Ltd. is a revoked Nevada corporation based in Kuala Lumpur, Malaysia, and the second asking for the company’s statement in a show cause order.

The local SEC issued an advisory to the public against investing in Togachat in July last year. This was followed by a show cause order in August, asking the company to defend keeping its certificate of incorporation.

Togachat denied the allegations in September, saying the violators are unaffiliated with the company and are using its name without authority. But the SEC said the reply “consisted of general denials” and had “nothing… that would refute the allegations of the complainants.”

The SEC then proceeded to issue a cease and desist order to the company in December, based on the evidence it found in its own investigations. It said Togachat is employing an investment scheme characterized as a Ponzi scheme, as it promises “impossibly high returns and pays these returns to early investors out of the capital contributed by later investors.”

“Consider that nowhere is it stated in the primary purpose of Togachat that it is authorized to engage in investment-solicitation activities…, the activities of Togachat… constitutes serious misrepresentation…which is a ground for the revocation of a corporation’s primary franchise…,” it said.

Meanwhile, the SEC issued a separate advisory against dealing with Eco Hatchery/Eco Hatchery and Trading Corp. It said this company is luring the public to invest in it in exchange of earning 15% every 15 days for four months, but it doesn’t have the necessary license to conduct such operations.

“The public is hereby informed that Eco Hatchery/Eco Hatchery and Trading Corp. is not authorized to solicit investments from the public as this entity did not secure prior registration and/or license to solicit investment from the Commission…,” it said.

“…the public is hereby advised to stop investing in the investment scheme being offered by Eco Hatchery/Eco Hatchery and Trading Corp. and its representatives,” it added. — Denise A. Valdez

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