SEC warns vs online Ponzi schemes

THE Securities and Exchange Commission (SEC) has warned the public against so- called online “paluwagan” schemes that collect money from investors with the promise of high returns within a short period of time.

In an advisory posted on its website, the country’s corporate regulator listed 30 social media accounts which it described as a Ponzi scheme, or a fraudulent investment operation where old investors are paid off using payments from new investors instead of real cash- generating business activities.

Administrators of the social media accounts were found to follow a scheduled collection of money from their respective members through remittances, wire transfer, and cash deposits, among others. The SEC noted that the social media accounts were also widely used for the promotion and operation of the scheme.

In exchange, members are promised high returns ranging from 10% to 757% in a span of one to ninety days, based on their payout schedule.

“Unfortunately, many of their respective members incurred huge loss of money and the administrators were reportedly unable to refund their investments. In view thereof, the public is hereby advised to stop investing in these kinds of activities and to take necessary precaution in dealing with these groups or their representatives,” the SEC said. —