Considering the gravity of the offenses committed, the multitude of affected investors as well as the propensity of the respondent companies to submit false declarations and misleading reports, the SEC made the cease-and-desist order on the Tibayan Group permanent to prevent them from further defrauding the public.
The CDO was issued to the group’s mutual fund unit Tibayan Group Investment Co. Inc. and 11 affiliates for selling unregistered securities and illegally promising investors a fixed return on their investment, which is not supposedly a feature of mutual funds.
The group offered three to 5.5 percent interest a month for a term ranging from six months to one year. An investor would receive seven post-dated checks, representing the interest and principal. The monthly interest, on the other hand, is deposited to the bank account of the investor.
In its new order, the SEC said the motion for consideration filed by the Tibayan Group should be denied as it failed to present any sufficient ground or basis to lift the CDO.
"The unrefuted evidence before this Commission cannot help but clearly demonstrate that the respondent companies, acting as one, are guilty of flagrantly and continuously violating the src. The evidence have demonstrated respondents’ disturbing and contemptible habit of repeatedly submitting false or misleading documents and records to this Commission," the SEC said.
According to the SEC, the group used numerous front corporations and partnerships to solicit investments from the public, thus circumventing the rule which requires prior registration of securities for issuance to over 19 individuals.
Among the companies covered by the CDO are TG Asset Management Corp., Matcor Holdings Company Ltd., Jetcor Equity Company Ltd., Sta. Rosa Mgt. and Trading Corp., Westar Royalty Mgt. and Trading Corp., Starboard Mgt. and Trading Corp., United Alpa Management and Trading Corp., Global Progress Mgt. and Trading Corp., Athon Management and Trading Corp. Diamond Star Management & Trading Corp., and Tibayan Management Group International Holdings Co. Ltd.
All these companies are either owned or controlled by businessman Jesus Tibayan.
Instead of operating as a mutual fund, TGICI engaged in the selling of investment contracts without license from the SEC. Under the src, no securities can be sold to the public unless registered with the Commission.