Philippines SEC Tightens Regulations To Curb Pyramid Schemes

Philippines SEC


The Philippines Securities and Exchange Commission (SEC) will tap local government units (LGUs) as part of the government’s intensified campaign against investment scams, amid the proliferation of get-rich-quick schemes in the country.

“SEC will engage LGUs in coordination with DILG (Department of Interior and Local Government) because companies, firms have to secure first business permits from LGUs before they can operate in localities,” said Armando A. Pan, Jr., officer-in-charge of the SEC Office of the Commission Secretary, in a text message on Sunday.

“So LGUs have to be watchful to ensure that businesses operating in their jurisdiction are legitimate,” Mr. Pan said.

The Department of Trade and Industry (DTI), through its Consumers’ Protection and Advocacy Bureau, and the SEC, through its Enforcement and Investor Protection Department, has instituted measures to warn the public against pyramid scams, Ponzi schemes, and other types of investment scams, Communications Secretary Herminio B. Coloma, Jr. said in an interview over state-run dzRB Radyo ng Bayan on Sunday.

Mr. Coloma cited reports from the DTI that the number of online scam cases in various regions in the country has increased along with the rise in the number of people using the Internet and online shopping.

In a text message on Sunday, Mr. Coloma said the measures includes increased surveillance and monitoring by the DTI and SEC; case buildup and actual filing of cases by the National Bureau of Investigation and Department of Justice; and financial education campaign.

According to Mr. Pan, the DTI, SEC, and other law enforcement agencies conducted a workshop last week.

The SEC and DTI will enhance their memorandum of agreement to intensify the campaign against scams, he said, adding that periodic meetings will be held to address common concerns.

Mr. Pan said the Bangko Sentral ng Pilipinas, Insurance Commission together with Philippine Deposit Insurance Corp. will continue financial education forums across the country.

Senator Grace Poe has filed a resolution urging the Senate committee on banks, financial institutions and currencies to conduct an omnibus inquiry on laws on securities and investments “to plug loopholes being exploited by unscrupulous companies to deceive the public into joining bogus investment schemes and networking scams” in light of the alleged P3-billion multi-level marketing scam by One Dream Global Marketing, Inc.

Last month, 18 investors of the company filed an estafa complaint before the Department of Justice against company officials led by the owner Arnel Gacer, vice-president Jobelle de Guzman and other officials.

Complainants claimed the company invited investors to pay P888, and assured them they would receive a payout of P1,300 after four days. The company also offered investors an additional P44 for every person they can recruit to the scheme.

One Dream Global Marketing abruptly stopped its operations last July 11 after various complaints due to its failure to give the payouts promised to investors.

The Department of Justice has convened a prosecuting panel to conduct the preliminary investigation into the alleged P3-billion investment scam.


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