SEC issues cease, desist order vs Bacolod-based firm over 'illegal' investment scheme

Raffy Cabristante, ABS-CBN News

Posted at Mar 03 2022 07:30 PM

A Bacolod City-based firm was ordered Thursday by the Securities and Exchange Commission (SEC) to stop its "illegal investment scheme" targeting individuals in Negros Occidental and the Western Visayas.

A cease and desist order (CDO) was issued against RGS World Marketing Corporation's "unlawful or unauthorized solicitation", as well as its offering and selling of securities until it has complied with the SEC's registration requirements and necessary approval.

"This Commission holds that the act of RGS WORLD 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," read the SEC's order, a copy of which was posted on the commission's website.

All individuals involved with RGS World were ordered to stop their internet presence offering the said scheme, including its Chairman and CEO Rodolfo "Raz" Salarda Jr. and directors Leah Pasis Salarda, Rodelyn Balico Salarda, Henje Noble Cuadra, and Ryan Ladoing, according to the order.

Further, the SEC prohibited the firm's officials from doing business-related transactions in banks, and from transferring, disposing of, or conveying any related assets to ensure that their investors' money is preserved.

The CDO was issued after investigations showed that RGS World had been enticing individuals in the Western Visayas into investing with their firm, promising returns worth up to four times their capital. 

In an advisory issued in March last year, the SEC showed a Facebook post from a certain "Emmie" of the firm's online marketing team saying investors can put in amounts from P1,000 to P20,000, that could turn to P3,500 up to P80,000.

To attract potential investors, officials, members, and existing investors of RGS World post their alleged payouts on social media.

Aside from the said investment scheme, the firm was also found by investigators to have promised in-kind incentives such as frozen goods and rice to entice investors, as well as other perks and bonuses through referrals or recruitment of more members. 

While RGS World is duly registered with the SEC, the commission said that the company has no license to issue securities through its investment scheme.

RGS World also distributed products such as soap, liniment oils, rice, eggs, and other poultry products, the SEC said. But records from the Food and Drug Administration (FDA) showed that the firm has no license to operate a distribution business.

The 2021 advisory of the SEC on RGS World warned the public to avoid or stop investing in the firm, which also operates under different business names: RGS Online Shop, RGS Online Marketing, and RGS Foundation.

"The public must be wary that any promise of massive rates of return with little or no risk is an indication of a Ponzi Scheme where monies from new investors are used in paying fake “profits” to earlier investors and is designed mainly to favor its top recruiters and prior risk takers," the advisory read.

The CDO said the SEC Bacolod City Extension Office had received numerous complaints from RGS World investors, claiming they have not been paid their guaranteed return and have not received the products promised to them. 

ABS-CBN News tried to reach Salarda, the firm's chairman, but was unavailable for comment as of posting time.

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