THE Securities and Exchange Commission (SEC) has warned the public against investing in Tagbilaran-based group The Philippines Good Samaritan Riders Association, Inc, (TPGSRA) since it has no authority to do so.
In an advisory posted on its website, the commission said it found that TPGSRA was soliciting investments from the public under the guise of donations. While the group is registered as a corporation with the SEC, it does not have a secondary license for the issuance of investments or securities.
The group, which also goes by the name of The Good Samaritan Riders Club, has reportedly been enticing the public to donate P8,000 to the association. The funds are said to be used to sponsor someone in need of a motorcycle.
A person must then look for two such sponsors so he or she can receive P5,000 in financial assistance which can be used as downpayment for a new motorcycle. TPGSRA will then pay the motorcycle’s monthly dues worth P3,000 for the next two months. It will continue paying for the motorcycle for the next 36 months depending on the number of donors it attracts.
“Such activities require a Secondary License from the Commission and the securities or investment product should likewise be registered with SEC before they can be offered or sold to the public under Sections 8 and 12 of the Securities Regulation Code (SRC),” the commission said.
Those found to be soliciting investments or recruiting more members into the group may be held criminally liable and penalized with a fine of up to P5 million and imprisonment of up to 21 years, as per the SRC.
In response to the advisory, TPGSRA said in a statement on its Facebook page that it has temporarily suspended operations to comply with the SEC rules.
“The association decided to temporarily suspend its operation effective immediately. All coordinators and sub-coordinators are hereby ordered to stop any activity that would contradict with the SEC advisory. Operations will resume as soon as the appropriate license and other legal requirements are fully complied with,” the group said.
The SEC has been conducting a crackdown on investment scams recently. Earlier this month, it filed a criminal case against alleged scam Kapa-Community Ministry International, Inc. and its officers before the Department of Justice.
Like TPGSRA, Kapa was also inviting the public to invest in the form of donations. A person may invest anywhere from P10,000 to P2 million in exchange for a 30% monthly “blessing” or “love gift for life.”
The commission earlier said it has already secured P100 million in assets linked to the religious organization through a freeze order issued by the Court of Appeals. — Arra B. Francia