SEC Facebook

This Advisory is prom
p
ted by reports and inquiries received by the
Commission from the public asking whether
REPA
/REPA PALUWAGAN
with
operations
in Bohol,
Davao
,
Bukidnon and Cebu
is registe
red with the Commission
and if it can solicit investments from the public.
Based on the said reports,
the persons
behind
REPA
/REPA PALUWAGAN
acting
as
“
administrators
”
(admins) and
“
sellers,
”
communicate
s with their victim
–
buyers
thru contacting them vi
a Facebook, Messenger o
r other chat groups and
personal transactions
and offering them
“
limited
slots
”
for
investment packages
where one may invest Php 50,000.0
0
promising
a
return of Php 20,000.00 or an
equivalent of
40% interest rate of return in just a
short period of time of
two (2) weeks
.
Slots for o
ther investment packages
being
offered that came to the attention
of the Commission are
, as follows
:
Php
1.5
k
turns to
Php
2.
5
k
,
Php2.5 turns to Php4k,
Php5.5k turns Php7k, Php9k turns Ph13k,
Php
14k
turns
to Php25
k
, Php25k turns to
Php40k
and
Php
28
k
turns to Php
50
k, all in a matter of two weeks or even less.
For the information and guidance of the public,
REPA
/REPA PALUWAGAN
does not appear
as a
registered corporation or partnership. Further, it is
NOT
AUTHORIZED to solicit investments/placements from the public nor to
issue investment contracts
and other forms of securities since it has not secured
prior registration and/or license from the Commission as prescribed under Sections 8
and
12
of the Securit
ies Regulation Code.
The income generated by the company does not appear to come
from
legitimate
business sources but solely from
the investments
being paid by its current
investors and by the newly recruited members. These false representations of
lucrat
ive return of investment within a short period of time from apparently
legitimate sources effectively lures the public to invest their hard
–
earned money to
their company.
The operations of this entity
is
a “
Ponzi Scheme”
which is defined as an
investment
fraud that involves the payment of purported returns to existing
investors from funds contributed by the new investors. They often recruit new
investors by promising to invest their funds in opportunities claimed to generate high
returns of investment. Th
ereafter, if there will be difficulties in recruiting new
investors or when a large number of existing investors opt to cash out, the Ponzi
scheme will collapse or result in a total breakdown and the new investors at the
bottom of the line of the pyramid w
ill not receive their returns anymore.
Applying the
Howey Test
as explained in the case of
Power Homes
Unlimited vs. SEC
(G.R. No. 164182, February 26, 2008),
REPA
/REPA
PALUWAGAN
’s investment packages
being
offered before the public
is
an
investment con
tract under the Commission’s regulatory power. Their activities
involving the offer and sale of securities to the public where their
investors need not
exert any effort other than to invest or place money in its scheme in order to earn
profit should be reg
istered and controlled by the Commission.
Briefly, an “
investment contract”
exists when there is an investment or
placement of money in a common enterprise with a reasonable expectation of profits
to be derived from the efforts of others which prominent o
n
REPA
/REPA
PALUWAGAN
’s
scheme.
Therefore,
REPA
/REPA PALUWAGAN
’s
lack of
juridical personality and
registration pertaining to its securities with the Commission make its activities illegal,
fraudulent and injurious to the investing public.
Further, the
offering and selling of securities in the form of investment
contracts using the
Ponzi Scheme
which is fraudulent and unsustainable, is
NOT
a
registrable security. The Commission will not issue a License to Sell Securities to the
Public to persons or entit
ies that are engaged in this business or scheme.
Hence, the
public is strongly advised
NOT TO INVEST
or
STOP INVESTING
in any scheme offered by
REPA
/ REPA PALUWAGAN
or such other entities
similarly engaged in investment contracts without prior
registratio
n from the
Commission.
The public is again reminded that investing in such an unregulated entity
lacks investor protection because it is not covered by prudential and market conduct
requirements applicable to licensed and authorized operations.
According
ly, the Commission warns all unscrupulous individuals and/or
entities that
strict penalties are imposed for v
iolations of the
Securities
Regulation Code, the Revised Corporation Code, and such other rules and
regulation enforced by the Commission
.
Those w
ho act as salesmen, brokers, dealers or agents of
such unauthorized
entities like the operators
, admins
and sellers
of the Facebook Page or other similar
social media of
REPA
/ REPA PALUWAGAN
in selling or convincing people to invest
in their investment sche
me offered including solicitations and recruitment through
the internet may likewise be
criminally prosecuted and penalized with a
maximum fine of Five Million pesos (P5,000,000.00) or a penalty of
Twenty
–
one (21) years of imprisonment or both pursuant to
Sections 28
and 73 of the SRC.
In the same manner, those who invite or recruit others to join or invest in
such venture or offer investment contracts or securities to the public similar to and
the operators of the
REPA
/REPA PALUWAGAN
may incur criminally
liability, or
otherwise be sanctioned or penalized accordingly as held by the Supreme Court in
the case of
SEC vs. Oudine Santos
(G.R. No. 195542, 19 March 2014).
The names of all those involved will also be reported to the Bureau of Internal
Revenue (BI
R) so that the appropriate penalties and/or taxes be assessed
correspondingly.
Should you have any information regarding any investment solicitation activity
by any individual or group of individuals representing
REPA
/ REPA PALUWAGAN
,
please send your repo
rt to the EIPD at [email protected].
For the guidance of the public.
Pasay City,
12 October 2021