SEC warns recruiters of investment scams


Posted at Aug 26 2015 05:00 PM | Updated as of Aug 27 2015 01:00 AM

MANILA - The Securities and Exchange Commission (SEC) is warning recruiters of unregistered investment schemes that they will face criminal charges if caught.

SEC said it will "not hesitate to invoke the full force of the law by imposing sanctions and by filing criminal charges against these violators."

In a statement released Wednesday, SEC reiterated that under Sec. 5.1 of the Securities Regulation Code, "securities shall not be sold or offered for sale or distribution within the Philippines without prior registration with the SEC."

It added that "no person shall engage in the business of buying or selling securities, as broker or dealer or act as a salesman, or an associated person of any broker or dealer unless registered as such with the Commission."

SEC expressed alarm that "Ponzi," pyramiding, and other forms of investment scams continue to proliferate in the country despite several advisories and efforts to curb illegal activities.

It is reminding the public that the "Ponzi" scheme is illegal and typically involves the promise of high returns without any viable business operation.

Under the scheme, profits promised to earlier investors are paid from funds collected from new investors.

"Legitimate multi-level marketing companies focus on marketing efforts rather that recruitment," SEC said.

SEC also warned investors that scammers are recently employing "novel schemes and devices" that use gold, precious metals, hidden treasures, travel opportunities, cars and other luxuries to lure investors.