SEC shuts two firms for fraud

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THE Securities and Exchange Commission (SEC) has ordered the shutdown of two investment companies which it found were operating fraudulent schemes.

In a statement Tuesday, the country’s corporate regulator said it issued a cease-and-desist order to Fast Track Worldwide, Inc. and JOCALS688 Beauty and Wellness Products Trading, Inc.

The two companies are alleged to be selling and offering securities in the form of investment contracts without authorization from the SEC, which is a violation of the Securities Regulation Code.

Aside from being told to cease operations, Fast Track and JOCALS688 are prohibited from transacting business that would involve funds in their depository banks.

The SEC said Fast Track was incorporated in February 2019 as a business dealing with direct selling of goods and merchandise. Its certificate of incorporation explicitly prohibits it from soliciting and accepting investments from the public.

But following reports that the company was engaged in such activities, the SEC said it found Fast Track was offering investment packages priced at P1,499 to P49,999 in exchange of as much as P3 million a year.

“This undoubtedly warrants the issuance of a cease and desist order because the act of Fast Track in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the SEC said.

Like Fast Track, JOCALS688 also has a registration with the commission, but its business was supposedly selling goods, commodities and merchandise such as beauty and wellness products, coffee, juice and herbal products.

The SEC said JOCALS688’s certificate of incorporation also prohibits it from soliciting investments and issuing investment contracts.

But after investigation, the regulator found that the company had been inviting the public to invest a minimum deposit of P10,000 to earn P13,000 after a month.

“The SEC found the scheme to have satisfied all the elements of an investment contract. In this light, JOCALS688 must have filed a registration statement with the commission and applied for a secondary license,” it said.

The cease-and-desist order for the companies cover their operators, partners, directors, officers, salespersons, agents, representatives, promoters and all persons claiming and acting for and on behalf of them.

The SEC is on a crackdown for groups that are selling securities without a secondary license from the government. It is also warning the public to be wary of putting their hard-earned money in such investment operators.

Aside from Fast Track and JOCALS688, the SEC had previously shut down CROWD1 Asia Pacific, Inc.; Lion City Finance Group, Inc.; and Payasian Pte. Ltd. Corp. for the same violations. — Denise A. Valdez