MANILA, Philippines – The advent of new technology has introduced innovative ways to make managing finances easier, but it also opens investors up to fraud.
Atty. Gerard Lukban, spokesperson of the Securities and Exchange Commission (SEC), warned that there are new types of fraud such as the selling of unregistered investment contracts in the form of pre-selling shares for hospitals or other public facilities not registered with SEC.
“We looked into these matters and we found out that a number of the companies that are pre-selling shares aren’t actually registered so we had to issue cease-and-desist orders on this,” Lukban said on ANC’s “On The Money.”
Lukban said there are certain “red flags” that should serve as tell-tale signs of an investing scam.
When being offered an investment scheme, for instance, Lukban advised doing a background check if the company is registered with the SEC.
The company’s primary license and its purpose should also be thoroughly checked.
“If you see in the purpose that it doesn’t have a license to do business as a broker, then that’s a red flag,” said Lukban.
He added that secondary licenses and operations within the bounds of the license should also be reviewed.
An investment salesperson that isn’t a licensed broker is also a red flag.
Lukban noted that any seller in the Philippines is in the jurisdiction of SEC.
“If they say that SEC Philippines doesn’t know about it because this is hi-tech, or not regulated, because it is international, that’s a red flag,” he said.
He also warned that when a salesperson or broker results to hard selling, or name dropping famous personalities, it could be signs of a scam.
Lukban added that SEC has also been getting reports of fraud involving foreign exchange trading.
“Sometimes, the smallest details of the operation, for example a money changer, would have to be regulated and licensed by the BSP,” he said.
Since 2006, Lukban said they have been seeing internet-based Ponzi schemes targeting online investors.
The SEC has been monitoring suspicious transactions in social media sites, but Lukban said the public should also be vigilant in trusting online companies or websites.
SEC is also coordinating with the National Bureau of Investigation in detecting cybercrimes and tracing questionable activities on the internet.
“If it looks too good to be true, then check it out. It might be too good to be true,” he said.