SEC SHUTS DOWN FAST TRACK FOR FRAUDULENT INVESTMENT SCHEMES
THE Securities and Exchange Commission (SEC) has issued cease and desist order against Fast Track Worldwide, Inc. to stem its fraudulent investment schemes.
In an order issued on May 28, 2020, the Commission ordered Fast Track to immediately stop its operations from soliciting investments from the public or engaging in similar activities.
Also, Fast Track is prohibited from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying in any manner all related assets to forestall grave damage and prejudice to all concerned and to ensure the preservation of the assets for the benefit of the investors.
Fast Track was incorporated by Rey Aldwin Bautista Valeriano, James Rhyan Espinosa Guillera,
Clive Christopher Cortez Llora, Jeniel Santos Aguilar, and Jay Piscadero Gregorio on February 18, 2019 primarily “to engage in direct selling of goods and merchandises to consumers.”
The certificate of incorporation issued to Fast Track expressly prohibited the corporation from soliciting, accepting or taking investments/placements from the public or issuing investment contracts.
However, evidence gathered by the SEC Enforcement and Investor Protection Department (EIPD) revealed that Fast Track actually offered investment packages bundled with health, lifestyle, and nutrition products for P1, 499 to P49, 999.
Investors were guaranteed with returns as much as P3 million a year, as well as commissions and bonuses when they recruit more people to invest in the company.
The scheme constituted the sale and/or offer of securities in the form of investment contracts, whereby a person invests money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC.
Accordingly, Fast Track must have registered the scheme with and secured a secondary license to offer securities for sale from the Commission, in accordance with The Securities Regulation Code.
Section 8 of Republic Act No. 8799, or The Securities Regulation Code, 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 Commission.
In the case of SEC vs. CJH Development Corp., the Supreme Court ruled that the act of selling unregistered securities would necessarily operate as a fraud on investors as it deceives the investing public by making it appear that the company has authority to deal on such securities.
Under Section 64 of the Securities Regulation Code, the SEC may issue a cease and desist order without the necessity of a prior hearing if, in its judgment, an act or practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public.
Prior to issuing the cease and desist order, the SEC has advised the public to avoid or stop placing their hard-earned money in Fast Track.
“[I]t is clear that Fast Track is not authorized to sell and/or offer the ‘Investment Packages’ to the public because they are securities in the form of investment contracts, and Fast Track does not have the requisite license from the Commission,” the SEC noted.
“This undoubtedly warrants the issuance of a cease and desist order because the act of Fast Track in selling/ offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public.” (PR)