SEC, BIR urged to probe investment plans offering ‘incredibly high’ returns

Senate Majority Leader Loren Legarda has urged the Securities and Exchange Commission and the Bureau of Internal Revenue to crack down on the promoters of dubious investment schemes that have been boldly putting up newspaper paid advertisements offering "incredibly high" returns.

Legarda cited the case of one scheme enticing investors with at least P50,000 to invest in a "special savings program" that earns 10 percent per month or 120 percent per annum.

"No legitimate investment program could possibly offer such a ridiculously high return on investment," Legarda said. "More important, no legitimate investment scheme that dutifully pays the proper taxes could possibly offer such a fantastic yield."

"Even credit card issuers, which charge the highest interest rates in the country for their consumer lending operations, are earning just 3.25 percent interest per month or 39 percent per annum," Legarda pointed out.

"Assuming these dubious investment programs pay just 20 percent in taxes in their earnings, that means their operators have to be netting more than 140 percent per annum to make a profit for themselves. That is preposterous," Legarda said.

"The SEC should act promptly and investigate these questionable investment programs for the possible illegal sale of securities or the illicit sale of investment contracts," Legarda said.

"The BIR should likewise investigate the operators behind these dubious investments schemes for possible tax evasion. It is very likely that these operators are not even registered for tax purposes," Legarda added.

One alleged dubious investment program offers a guarantee by way of an investment contract and post-dated checks payable to the investor.

Legarda’s call came not long after the SEC and hundreds of individual investors filed criminal charges against Multitel International Holdings Inc.

Multitel allegedly lured investors by offering a whopping four percent guaranteed monthly interest for a minimum investment of P10,000 or a "double-your-money" rate in case the investor opts to lock-in his or her money for 18 months.