The Securities and Exchange Commission (SEC) Butuan Extension Office has warned the public against falling victim to two emerging investment scams allegedly being run by individuals and groups offering unrealistic profits through bitcoin trading and consumer goods investments.
In an advisory posted on social media by the Philippine Information Agency (PIA) Caraga, the SEC’s Enforcement and Investor Protection Department (EIPD) identified a certain Christabel Arroyo and De Guzman Consumer Goods Trading as entities operating unauthorized and illegal investment schemes that promise fast and supposedly guaranteed returns.
The advisory by SEC gives links to the detailed background of the alleged schemes for public awareness.
According to the SEC, Christabel Arroyo, through her Facebook and Messenger accounts, has been soliciting funds from the public for a supposed bitcoin mining and trading business. She allegedly offers investors a chance to earn up to ?50,000 within 24 hours for a minimum investment of ?5,000.
Reports gathered by SEC indicated that Arroyo presents her ‘investment plans’ to potential investors and even provides a GCash account number used to collect investment money and distribute payouts.
However, the SEC clarified that Arroyo is not registered or licensed as an investment solicitor, broker, dealer, or agent authorized to sell securities under the Securities Regulation Code (SRC).
‘The public is advised not to invest or stop investing in any scheme offered by Christabel Arroyo, as her investment operations are not registered with the Commission,’ the SEC said.
Ponzi scheme
The SEC also flagged De Guzman Consumer Goods Trading, which it said is not registered as a corporation or partnership and operates without the necessary license or authority to solicit or accept investments from the public.
According to the EIPD, De Guzman Trading’s investment activities bear the classic traits of a Ponzi scheme-a fraudulent setup where money from new investors is used to pay ‘profits’ to earlier ones.
‘This type of scheme is designed mainly to favor its top recruiters and early investors while leaving later participants at a loss once new investors stop coming in,’ the SEC explained.
Under the Financial Products and Services Consumer Protection Act (Republic Act No. 11765), any person or entity committing investment fraud, including Ponzi schemes, can face severe penalties.
Criminal Penalties
The SEC warned that those acting as salesmen, brokers, dealers, agents, promoters, uplines, influencers, endorsers, or recruiters for either Arroyo or De Guzman Trading may be held criminally liable.
Violators face penalties of up to ?5 million in fines, 21 years of imprisonment, or both, the SEC said.
The Commission urged the public to exercise extreme caution when dealing with individuals or groups offering ‘too-good-to-be-true’ investment opportunities online.