SEC issues cease and desist order vs bogus Ayala Group

THE Securities and Exchange Commission (SEC) has issued a cease and desist order against entities using the name of Ayala Corporation to illegally solicit investments from the public.

In an order dated February 22, the Commission En Bancdirected Ayala Corporation Group, Inc., Ayala Corporation Budgetarian Online Shop, Global Online Ayala Corporation, Bellavita Ayala Corporation, and Ayala Corporation E Commerce to immediately cease and desist from further engaging in the unlawful solicitation, offer, and/ or sale of securities in the form of investment contracts without the necessary license from the SEC.

The Commission further prohibited the group from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets of its investors.

The order covers officers, operators, promoters, representatives, salesmen, agents, uplines, enablers, influencers, and any and all persons, conduit entities, subsidiaries and affiliates claiming and acting for and on behalf of the bogus Ayala group.

The Commission issued the order after the SEC Enforcement and Investor Protection Department (EIPD) found that the bogus Ayala group has been conducting an unregistered investment scheme called Tasking and Recharging, which offers online jobs to prospective investors who are tasked to perform certain tasks in exchange for commissions.

Investors are also invited to buy consumer products from partner-sellers or merchants to improve store rankings to receive commissions.

The bogus Ayala group’s scheme involved the sale and/or offer of securities in the form of investment contracts, whereby a person makes an investment of money, in a common enterprise, with the expectation of profits, to be derived solely from the efforts of others, the Commission held.

Section 8 of Republic Act No. 8799, or The Securities Regulation Code (SRC), provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.

The bogus Ayala group was also found to be showing copies of fake incorporation documents with the SEC and registration papers with the Department of Trade and Industry (DTI) to establish legitimacy.

“[The bogus Ayala group] willfully employed fraud by making it appear to the public that they are legitimate corporations authorized to sell, offer, and deal with securities,” the order read.

“The Bogus AC Group also used spurious DTI Certifications and SEC Registration Certificates to provide its unauthorized investment-taking activities a semblance of legitimacy. The foregoing shows a clear intent on the part of the Bogus AC Group to defraud the public which, if unrestrained, will likely prejudice them.”

In addition, applicants for company registration must use a name that is distinguishable from other corporate or partnership names registered with the SEC, according to SEC Memorandum Circular No. 13, Series of 2019, or the Amended Guidelines and Procedures on the Use of Corporate and Partnership Names. /