SEC red-flags three ‘pyramid’ schemes
The Securities and Exchange Commission (SEC) has warned investors against putting their money in three companies as the regulator intensifies measures against investment scams that offer supposedly hefty returns.
The corporate watchdog said in separate advisories that FX Affiliate, Gercel Apparel Shop and Gercelhomes Staycation are not authorized to solicit investments from the public.
According to the SEC, it had already previously flagged FX Affiliate founder Joed Baron for his involvement in a separate investment scheme.
FX Affiliate, meanwhile, did not have a license to sell securities to the public.The SEC found that Baron required a minimum investment of P1,000 per investor, promising to double their investment after 60 days.
At the same time, Gercel Apparel and Gercelhomes, which both earn through online selling of their products and condominium unit rentals, offered packages with a minimum investment of P5,000 to P100,000, with weekly earnings of P1,000.
In particular, the SEC said the packages offered by Gercelhomes were considered a possible fraudulent Ponzi scheme where funds from new investors are used to pay fake profits to earlier investors.This type of scheme is likewise made “to favor its top recruiters and prior risk takers, and is detrimental to subsequent members in case of scarcity of new investors,” the SEC said.
Under the Securities Regulation Code, securities and agents must first be registered with the commission prior to the sale of securities.
Violators may face a maximum penalty of P5 million or imprisonment of 21 years, or both. INQ
