SEC issues gag order on Jacama

By ARMANDO B. FENEQUITO JR.
The Securities and Exchange Commission (SEC) has issued a cease and desist order against Davao City-based networking firm Jacama Sales and Marketing for violation of Republic Act (RA) No. 8799 otherwise called as the Securities Regulation Code.
SEC enforcement and investment protection department director Jose P. Aquino said in a press briefing on Friday at Grand Men Seng Hotel, that the company owned by Janus Carlo D. Manalang should stop their operation for violating sections 8 and 28 of the law.
Aquino said Jacama is engaged in the offering and selling of securities in the form of investment contracts which need registration from SEC.
“Manalang and all the persons acting for and on their behalf are acting as either broker or a dealer without a license from SEC,” he said.
Section 8 of the law states 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. Prior to such sale, information on the securities, in such form and with such substance as the Commission may prescribe, shall be made available to each prospective purchaser.”
Section 28 also states “no person shall engage in the business of buying or selling securities in the Philippine as a broker or dealer, or act as a salesman, or associate of any broker or dealer unless registered as such with the Commission.”
Aquino said that based on their investigation, there is sufficient evidence showing Jacama is soliciting investment from the public employing the Ponzi scheme in the sale and marketing of its products.
Ponzi scheme, according to www.sec.gov, it is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.
He said under its cash back guarantee sales program, Jacama offers to pay back 25 percent of the money invested every 15 days up to a period of 90 days.
“After a period of 90 days, Jacama offers to give back to the investor his investment of P1,800 and a profit of P9,000 or 50 percent return of his investment in addition to the products investors invested in,” he said.
The Davao City government last January closed down Jacama for alleged misdeclaration in its business permit.
City administrator Jesus Melchor V. Qutiain said in its application for business permit, the company indicated it was a “retail” company that would do “a little wholesale.”
But, Quitain said it turned out that their operations or the transactions involved investments.
He said the capital amount the company declared was only P250,000 even though it had millions of pesos worth of transactions.