SEC issues cease and desist order against JOCALS688
The Securities and Exchange Commission (SEC) has issued cease and desist order against JOCALS688 Beauty and Wellness Products Trading, Inc. to stem its fraudulent investment schemes.
In a separate order issued on May 28, the Commission ordered JOCALS688 to immediately cease and desist, under pain of contempt, from soliciting investments from the public or engaging in similar activities.
The SEC further prohibited JOCALS688 from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying in any manner all related assets to forestall grave damage and prejudice to all concerned and to ensure the preservation of the assets for the benefit of the investors.
The cease and desist order covers the corporation’s operators, partners, directors, officers, salespersons, agents, representatives, promoters, and all persons, conduit entities and subsidiaries claiming and acting for and on its behalf.
The SEC ordered JOCALS688 to stop their operations after finding that such entity is engaged in the sale and/or offering of securities in the form of investment contracts without prior registration and the corresponding permit.
“We urge everyone to stop investing to JOCALS688 especially today that the Commission has ordered cease and desist order against them already. To continuously keep our mandate which is to protect the investing public against these fraudulent schemes, please verify it with the Commission first before parting your money to an entity which you are not sure if it’s licensed and regulated with SEC” Atty. Renato V. Egypto, SEC-CDOEO Director said in a statement.
Section 8 of Republic Act No. 8799, or The Securities Regulation Code, provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission.
In the case of SEC vs. CJH Development Corp., the Supreme Court ruled that the act of selling unregistered securities would necessarily operate as a fraud on investors as it deceives the investing public by making it appear that the company has authority to deal on such securities.
Under Section 64 of the Securities Regulation Code, the SEC may issue a cease and desist order without the necessity of a prior hearing if, in its judgment, an act or practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public.
Prior to issuing the cease and desist orders, the SEC has advised the public to avoid or stop placing their hard-earned money in JOCALS688.
Atty. Egypto added that, “We have done all sorts of information dissemination campaigns to inform and caution the public about JOCALS688 over radio interviews, sending emails directly to local officials and, releasing of information through our partners in the government and the media networks particularly about the issuance of Advisory against the said entity before.”
JOCALS688 registered as a corporation on October 9, 2019 to engage in the sale, distribution, marketing and trading of goods, commodities and merchandise such as beauty and wellness products, coffee, juice and herbal products.
The company headquartered in Zamboanga del Sur named Joshua A. Calderon, Echochen M. Calderon, Noemie C. Ponce, Hanz R. Paler and Nino S. Agad-ad as directors in its articles of incorporation.
In a certificate of incorporation issued to JOCALS688 provides that the corporation “shall not solicit, accept or take investments/ placements from the public neither shall it issue investment contracts.”
The Enforcement and Investor Protection Department (EIPD), however, found that JOCALS688 enticed members to deposit a minimum of P10,000 to earn P13,000 after a month. Alternatively, one could become a member by purchasing a package of products for P3,800.00.
Members could earn by selling the products. However, they could supposedly receive bigger returns by simply recruiting more people into the scheme.
The SEC found the scheme to have satisfied all the elements of an investment contract. In this light, JOCALS688 must have filed a registration statement with the Commission and applied for a secondary license.
“Thus, in the absence of a secondary license, JOCALS688 should be restrained from offering or selling securities in the form of investment contracts,” the SEC concluded.
The Commission also pointed out that the capitalization of JOCALS688 only amounted to P1 million while it promised investors a guaranteed 37% monthly income.
“Clearly, JOCALS688’s business model and capitalization cannot sustain the promised returns of investment, especially if no new investors will come in,” the SEC noted.
“Pay-outs for investors are financed from investments of new recruits/ investors. This is a fraudulent scheme which will likely cause grave or irreparable injury or prejudice to the investing public.”
The SEC earlier issued similar cease and desist orders against CROWD1 Asia Pacific, Inc., Lion City Finance Group, Inc. and Payasian Pte. Ltd. Corporation for engaging in unauthorized investment schemes. (SEC)
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