Fraud thru ‘social media’
SEC warns the public against unregistered investment entities in the country
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.