The Securities and Exchange Commission (SEC) has warned for the nth time investors in Davao City that investment-taking activities that offer “double-your money (DYM)” are illegal.
“Entities proliferating such as investment-taking schemes must be duly registered with the Commission and that any person or entity intending to offer and sell its investment contracts are required to secure the necessary registration and/or license from the Commission as provided under the Securities Regulation Code,” the SEC’s Enforcement and Investor Protection Department stated in an advisory released last week.
Those behind these schemes “do not have a real business model to back up the profits that are going to be given to prospective investors. Essentially, the income generated from the foregoing investment-taking scheme depends on the number of referrals, membership fees and/or prior investments received by the entities,” the department added.
These schemes have “the characteristics of a ‘Ponzi Scheme’ where the ‘income’ given to the initial investors are taken from the subsequent investors.” “This business model is unsustainable and will inevitably result in the demise of the business which directly results in the prejudice of the investors,” it pointed out.
The office earlier warned of individuals who were soliciting investments from the public with the promise to double their money in just a month. After the warning was raised, several individuals went to the City Anti-Scam Unit to complain that they could not recover their investments.
Based on the complaints from about 20 individuals, the person soliciting the money from them has run away.
Now despite the constant crackdowns conducted by the SEC against these scammers, they persist in committing the crime and victimize more people.
Has the SEC and its partners enforcement agencies not done enough? Are the penalties stipulated in the law too light for the malefactors found guilty of the crime?
Maybe there is a need to revisit the law and make it harsher to really discourage felons from committing the crime instead of becoming habitual offenders or recidivists.
