This developed as reports came out in the Kingdom of Saudi Arabia that Powerhomes has established its operations there and has been actively luring OFWs to invest in their scheme.
The SEC had issued a cease-and-desist order (CDO) against Powerhomes early this year for selling unregistered investment contracts that constitute a form of the illegal pyramid scheme, in violation of the Securities Regulation Code.
Another company engaged in the same nature of business, Prosperity.com, was similarly issued a CDO and was padlocked last May by a crack team from the SEC and the National Bureau of Investigation after it continued to operate and recruit more members, in defiance of the CDO.
Lawyer Tomas Syquia, director of the SEC’s Compliance and Enforcement Department, said they have circulated the warning through Philippine embassies especially in areas with a large contingent of OFWs such as KSA, Hong Kong, Japan, United Arab Emirates, Taiwan and Singapore.
He said Powerhomes was able to carry on with its activities and has expanded its operations abroad as it has secured an injunction from the Court of Appeals. The SEC, now acting through the Office of the Solicitor General, has filed motions for reconsideration and early resolution to expedite the case.
The SEC issued the CDO against Powerhomes for engaging in the selling of unregistered securities or investment contracts through network marketing.
Under their sales scheme, Powerhomes gives its members the opportunity to own real estate such as a house and lot package in exchange for $298 in enrollment fee.
Upon enrollment and completion of training, the members is awarded his/her own Business Center — usually an Internet web site — wherein he can recruit other members for a fixed commission. – Conrado Diaz Jr.