SEC warns investors against ‘boiler room’ tactics
The Securities and Exchange Commission (SEC) has warned against another company for supposedly soliciting investments from the public without the necessary permit and employing “boiler room” tactics.
In a May 26 advisory, the corporate watchdog said employees of BMJ Data Processing Services allegedly promised easy money through a cryptocurrency trading system called “Quantum AI.”
According to the SEC, the employees were reportedly pretending to be financial advisors using “emotional manipulation and false claims of licenses” to dupe people into shelling out at least $250.
The SEC refers to this scheme as a “boiler room” operation because of the “high-pressure sales tactics” used to scam people into buying fake investment products.
“These schemes typically operate out of makeshift offices, such as call centers or rented business spaces where agents (sometimes unaware of the scam themselves) aggressively cold-call potential investors,” the commission said in its advisory.
“They often use misleading information, false credentials or promises of high returns to victims to part with their money,” it added.
Not authorized
While BMJ is registered with the Department of Trade and Industry, the SEC pointed out that it was not registered with the commission.
It is likewise not authorized to solicit investments from the public as it did not have the required license to do so under the Securities Regulation Code (SRC).
Those found violating the SRC via the unauthorized solicitation of investments may be fined up to P5 million or imprisoned for 21 years, or both.
This comes as part of the SEC’s recent crackdown on sham investment schemes, particularly those involving financing and lending companies, to protect the public from fraud.
The SEC recently canceled the corporate papers of several companies for selling investment packages to the public without first registering with the commission.
The agency also revoked the primary registrations and certificates of authority to operate of more than 50 companies last month.
