MANILA — The Securities and Exchange Commission (SEC) has revoked the certificates of incorporation of two firms for orchestrating unauthorized investment schemes, imposing millions of pesos in total fines against their officials for “fraudulent intent” and “serious misrepresentation.”
In a decision released Monday, March 23, the SEC identified the penalized entities as Valtoro Spartan Consultancy Corporation and Reason Land Ventures and Realty Development Corp. The Enforcement and Investor Protection Department (EIPD) ordered all incorporators, stockholders, and officials of both companies to pay an administrative fine of PHP 1 million each. Furthermore, the officials of Valtoro Spartan have been disqualified from holding any corporate directorships or officer positions for five years due to investment fraud.
According to the SEC, Valtoro Spartan utilized websites and social media to lure the public into five “lock-in subscription plans.” These plans promised investors returns ranging from 7.5 percent to a staggering 912.5 percent within 15 days to one year, for a minimum entry of just USD 50 (approximately PHP 3,000).
The firm also employed a predatory recruitment model, offering a 5-percent direct referral bonus and a multi-level commission reaching up to the tenth level of invitees.
In its revocation order, the SEC noted that the firm’s registered activities were a mere facade: “Considering that the act of offering investment to the public is not included in the primary purpose of [Valtoro Spartan], the declared primary purpose was done with fraudulent intent due to the large disparity of its declarations in the AOI (Articles of Incorporation) and its actual business operation.”
Simultaneously, the SEC shut down Reason Land Ventures and Realty Development Corp. for offering unregistered securities disguised as a hostel business. The company allegedly solicited a minimum capital of PHP 30,000 per share, promising “passive income” for 30 years.
However, investigators concluded the business model was a classic Ponzi operation, where payouts were funded by new recruits rather than legitimate revenue.
“Considering that nowhere is it stated in its primary purpose that [Recson Land], is authorized to engage in the selling or offering for sale of securities to the public…the activity of [the company], of selling or offering for sale of investments is considered an ultra vires act and therefore constitute serious misrepresentation,” the SEC stated.
The commission emphasized that the firm “does not have any underlying legitimate business,” relying solely on the “investments of incoming investors or additional pay-ins of its existing members.”
The SEC reiterated its call for Filipinos to be wary of investment opportunities that promise high returns with little to no risk. These latest revocations form part of the commission’s heightened crackdown on entities operating without the necessary secondary licenses to solicit investments from the public.
By revoking the corporate life of these firms and imposing heavy financial penalties, the regulator aims to dismantle “ultra vires” activities that prey on the financial resources of unsuspecting citizens.| PNA
