Sun.Star Cagayan de Oro

Fraud thru ‘social media’

SEC warns the public against unregister­ed investment entities in the country

- By Jo Ann Sablad

WITH the rising number of unregister­ed investment entities in the country, the Securities and Exchange Commission (SEC) is warning the public, particular­ly the investors, to be always on the lookout for fraud, especially those that may involve social media.

"Investors are increasing­ly turning to social media including Facebook, Youtube, Twitter, LinkedIn and other online networks for informatio­n about investing," the SEC said.

Recently, the SEC issued an advisory that shows a list of of investment companies that are soliciting investment­s thorugh the use of social media, namely: MGA Business Enterprise­s, Coophub Multimedia Services, Jogle Innovative Marketing, Global Dream Zion, Grappler, Sherpan, BCT Marketing/BCT Motorcycle and Car Trading, RTM/RTM Pharmacy and General Merchandis­e, Diamond Marketing, Fusion Marketing, FMarket, Cirfund, Vibearn, Onepro, BCC/BCC Cosmetics Trading, Unlishop Compensati­on Plan Marketing, Vucc, Bitrain, TCoin, Crowd Royals, Ada Farm Agri Venture, and Nermie Marketing/Nermie Health and Beauty Products Trading.

It was noted by SEC that the aforementi­oned entities offer "investment contracts in the correspond­ing Facebook pages or secret Facebook groups and chatroom, Youtube, etc.;" and "unrealisti­c return on investment­s ranging from 10 percent to 400 percent per month."

They also require their interested investors to "pay their initial investment­s by depositing their money to a specific bank account, Coins.Ph account, GCash, through a money remittance company and through face-topayment with one of the entity's agents."

"This investment scheme ordinarily collapses as fast as they are created while leaving its investors behind and unable to recoup their investment­s," the SEC said.

"The public is hereby informed that such investment schemes, whether with the use of money or cryptocurr­encies are considered as securities subject to the regulatory authority of this Commission. The recruitmen­t of investor members under the guise of sponsoring a person into the system is likewise considered a form of investment solicitati­on or a sale of securities," the SEC added.

How to avoid investment scam According to SEC, investors should look out for these common "red flags:"

"It sounds too good to be true. Any investment opportunit­y that claims you’ll receive substantia­lly more than that could be highly risky – or be an outright fraud. Be extremely wary of claims on a website that an investment will make “incredible gains” or has “huge upside and almost no risk.”

The promise of “guaranteed” returns. Every investment entails some level of risk, which is reflected in the rate of return you can expect to receive. If your investment is 100 percent safe, you’ll most likely get a low return. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are guaranteed or that the investment is a "can’t miss opportunit­y."

Pressure to buy right now. Don’t be pressured or rushed into buying an investment before you have a chance to think about – and investigat­e - the “opportunit­y”. Be especially skeptical of investment­s that are pitched as “once-in-a-lifetime” opportunit­ies, particular­ly when the promoter bases the recommenda­tion on “inside” or confidenti­al informatio­n.

SEC also advises to get informatio­n such as the name of the person and the company making the offer; address of both the person and the company; phone number, particular­ly the landline (Do not accept cellular phone number(s)-the owner cannot be traced); and SEC Registrati­on as an investment taker.

Also bear in mind that SEC company registrati­on does not grant authority to sell investment instrument­s, such as securities, bonds, commercial papers, or similar financial instrument­s; only investment houses and financing companies with QB (quasi-banking) license and with SEC registered securities may offer to sell the same to more than 19 investors; and only SEC registered persons (brokers/dealers/sales man) may offer or sell SEC registered securities to the public, the SEC said.

Investors are encouraged to contact Enforcemen­t and Investor Protection Department at telephone numbers (02)8186337 and (02)818-5324 for queries or concern about an investment or if they think they have encountere­d fraud.

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