Ads Here

Monday, May 18, 2020

SEC stops firm’s investment scheme disguised as digital marketing biz

The Securities and Exchange Commission (SEC) has ordered CROWD1 Asia Pacific to immediately stop soliciting and accepting investments from the public under a scheme disguised as a digital marketing business.

In an order issued May 12, the SEC directed CROWD1 to cease and desist from engaging in activities of selling and/or offering for sale securities in the form of investment contracts or other similar schemes without prior registration and permit to sell.

The SEC also ordered CROWD1 to cease from promoting its investment scheme in social media and other online platforms.

The SEC issued the cease and desist order after finding that CROWD1 has operated “a fraudulent investment scheme consisting of the sale and/or offer of inexistent securities in the form of investment contracts to the public.”

CROWD1 solicits and accepts investments from the public by offering what it describes as educational packages for a minimum of P6,000 and as much as P240,000. To entice the public to invest, CROWD1 promises member-investors five different bonuses: streamline bonus, binary pairing bonus, fear of loss bonus, matching bonus, and residual bonus from games and gambling apps.

CROWD1 likewise touts a pairing incentive payable in euros to encourage member-investors to recruit new members.

Representing itself as a digital marketing business, CROWD1 claims it generates income from online games and facilitates the generation by its members of residual income from its affiliate gaming companies such as AFFIGLO and MIGGSTER.

The SEC, however, ruled that CROWD1’s scheme involved the sale and/or offer of securities in the form of investment contracts and, thus, required a secondary license under Republic Act No. 8799, or The Securities Regulation Code (SRC).

The agency also ruled that the act of CROWD1 of publishing and making presentations on its investment/business scheme through its website, Facebook, YouTube and on-ground events, and inviting investors constituted a public offering as defined by the SRC.

CROWD1 did not secure a secondary license to operate as a broker or dealer and only registered as a corporation for the primary purpose of engaging in business process outsourcing services. The SEC emphasized that the certificate of incorporation granted to CROWD1 explicitly prohibited the corporation from soliciting, accepting or taking investments or placements from the public as well as from issuing investment contracts.



Source: Newsbytes Philippines

No comments:

Post a Comment