SEC flags more firms, warns of fake regulator’s Facebook page

Keren Concepcion G.



THE Securities and Exchange Commission (SEC) issued six advisories this month so far, five of which flag unauthorized investment schemes while one was against a Facebook page posing as the commission.

The regulator flagged BCPay Financial Technology, Inc., Wealth on Web Company or WOW Trade, Bitrade Administration of Financial Marketing, Big Boss Marketing, and RM Trading. It also issued an advisory against SEC News and Updates Facebook Page, clarifying that it is “not, in any way, connected or affiliated” with it.

Noting the rise in investment scams, the commission held a “How to Spot and Unmask Investment Scams” on Friday as it participated in the global campaign organized by International Organization of Securities Commissions for World Investor Week.

“Investing in the capital market is perceived as complicated and intimidating. Fraudsters have taken advantage of this lack of knowledge and misguided perception to entice the public to invest in unauthorized investment schemes,” SEC Chairperson Emilio B. Aquino said.

The SEC said although some corporations or entities are registered with the commission as corporations or partnerships, a secondary license is needed to offer securities or investments to the public.

BCPay Financial Technology and Wealth on Web Company or WOW Trade are both registered with the commission, however, neither have the permit to sell securities to the public.

Bitrade Administration, Big Boss Marketing, and RM Trading are all not registered with the regulator. While Bitrade Administration was granted a Certificate of Business Name Registration by the Department of Trade and Industry on Aug. 24, it still lacks the required registration and/or license to solicit investments from the public.

Oliver O. Leonardo, the officer in charge of the SEC’s Enforcement and Investor Protection Department, noted that the most common type of investment scams are pyramid schemes and Ponzi schemes.

“Both schemes circulate the money collected to fool investors — ‘profits’ of old investors are paid for through the money invested by new recruits,” Mr. Leonardo said in Filipino, adding that the schemes become unsustainable once the entity can no longer find new investors.

The SEC said both Big Boss Marketing, which promises investors a 100% return on investments within 25 days through its double-your-money program, and RM Trading with its 40% monthly passive income promise show indication that their investment programs are modeled after a Ponzi scheme.

Meanwhile, Wealth on Web Company or WOW Trade offers multiple investment packages, promising investors returns of at least 3% to 6% daily, depending on the program.

Some entities also lure investors through selling products or inviting them to be resellers, Mr. Leonardo said. However, these selling programs do not emphasize the need to sell or earn through the products, but rather put importance on recruiting more resellers in exchange for a referral commission.

Other popular unauthorized investment schemes include enticing the public to be the entity’s business partner through offering franchise programs, even though there is no clear business program or the said business is nonexistent.

Fraudsters are also banking on the rise of cryptocurrencies to lure people into their unlicensed investment programs. Entities are promising would-be investors huge profits within a short period of time, however, their investments in cryptocurrencies do not exist.

These entities would take advantage of investors’ lack of knowledge about cryptocurrency or blockchain technology to lure them into the program, Mr. Leonardo said.

Late payouts and the lack of a “white paper” are some signs that the cryptocurrency investment program is a scam. The SEC said programs of these entities mirror pyramid or Ponzi schemes.

The SEC flagged BCPay Financial Technology for its investment scheme, noting that its “offering is an indication of a possible Ponzi scheme. It claims to be “one of the ‘few’ SEC-registered crypto companies in the Philippines,” luring investors by promising up to a 12% annual percentage yield (APY) through its platform and up to 180% APY by providing liquidity during its initial coin offering.

However, BCPay Financial Technology is not registered as a virtual asset service provider with the Bangko Sentral ng Pilipinas, among the other licenses and registration requirements it lacks. The entity also uses an unregistered online lending platform, FastCash3k.

Another platform luring investors to its alleged crypto trading program is Bitrade Administration. It offers investors a 50% profit within 15 days for as low as P1,000 as well as a referral bonus of 5% and an indirect referral bonus of 1%.

The commission reiterated that those who act as representatives of unlicensed investment schemes may be penalized with a maximum fine of P5 million or face 21 years behind bars, pursuant to Section 73 of the Securities Regulation Code.