SEC said the warning would be posted by the Department of Foreign Affairs at every consulate office to ensure that Powerhomes would not be able to operate surreptitiously while the commission’s cease and desist order is in place.
Reports reaching the SEC show that despite the CDO against the company, Powerhomes has established its operations in the Kingdom of Saudi Arabia and has been actively luring OFWs to invest in their scheme.
The SEC issued a cease-and-desist order (CDO) against Powerhomes early this year for selling unregistered investment contracts, calling the company’s operation as a form of a pyramid scheme, in violation of the Securities Regulation Code.
Another company engaged in a similar business, Prosperity.com, was also 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.
SEC associate commissioner Edijer Martinez said the commission’s compliance and enforcement department 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.
The SEC’s audit team reported that Powerhomes was able to carry on with its activities and has expanded its operations abroad after securing an injunction from the Court of Appeals thus preventing the SEC from implementing its CDO. 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 fixed commission.