THE country’s corporate regulator is warning the public against engaging in groups that employ pyramiding schemes as such a money-making method is not authorized by the government.

The Securities and Exchange Commission (SEC) has issued an advisory on its website telling people to steer clear of scammers that raise profits through recruitment.

“Pyramiding, being fraudulent and unsustainable, is not a registrable security. The (SEC) has not and will never issue a License to Sell Securities to the Public to persons or entities that are engaged in this business,” it said.

It noted that in this investment method, which thrives with the supply of new recruits, money declines the moment recruitment declines.

The SEC identified in separate advisories RaisedHerbs Zion Marketing (RZM), Rising Era Dynasty Inc. (RED), Newmont Philippines, Ielev8 Network and Ielev8 Health and Wellness Co. as unauthorized groups offering investment opportunities through recruitment or referral.

RZM operates through marketing teams on Facebook that recruit people to invest at least P1,500 and earn by direct selling, sponsor bonus, matching bonus or unilevel/override commission.

RED also has presence on Facebook and runs its own website, offering herbal products such as food supplements and anti-mosquito lotion and soap. The public is invited to join to start their own businesses, and then encouraged to engage in recruitment, pairing and matching to earn up to P100,000 for an investment of P8,840 within a week.

Newmont Philippines masks itself as engaging in mining and manufacturing of heavy equipment with operations overseas, which was disproved by the SEC in its own investigation. It invites investors to earn through passive income, referral bonus or overall sales income from downline.

Ielev8 Network and Ielev8 Health and Wellness are operated by the same person and both offer daily income through the reselling of capsules and herbal tea. To earn more, recruited members may engage in referral and matching, and receive incentives and bonuses in exchange.

The SEC said all these groups are unauthorized to solicit investments from the public as they did not secure the secondary license required to operate such activity. Doing so is a violation of the Securities Regulation Code, which spells penalties for the people behind these groups.

Anyone that acted as salesman, broker, dealer or agent in inviting people to invest in these groups may be fined up to P5 million, imprisoned for up to 21 years, or both. Their names will also be submitted to the Bureau of Internal Revenue for appropriate penalties.

“(T)he commission encourages the public to be prudent in making or placing their monies on these entities especially during this pandemic,” it said. — Denise A. Valdez

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