SEC probes 6 firms believed engaged in pyramiding

Bent on stopping the proliferation of investment scams in the country, the Securities and Exchange Commission is investigating five or six companies believed to be engaged in pyramiding or Ponzi schemes.

Tomas Syquia, head of the SEC Compliance and Enforcement Department, said the commission is now focusing on medium-sized corporations suspected of engaging in schemes that offer high interest rates for placements of P10,000 to P50,000 in just a short period of time.

Syquia refused to name the corporations under the SEC’s watchlist pending completion of its investigation.

The commission, he said, has been receiving a lot of queries from the public about certain corporations offering hefty investment returns. We’ve been receiving more queries from the public. People are getting more aware of these investment scams. I guess this is the effect of the information campaign we have launched against fraudulent schemes, Syquia said.

As it steps up its drive against illegal solicitation of investments, the SEC has warned the public anew against certain get rich-quick schemes that require immediate investment.

The SEC said would-be investors should be suspicious of inside information, hot tips, and rumors that supposedly will give you a big advantage over other, less knowledgeable investors.

The corporate watchdog agency said the public should also be wary of unexpected telephone calls, letters or even personal visits from people who promise hefty investment returns.

Before making any commitment, investors are advised to consult their lawyer, stockbroker or accountant or the appropriate government agency.

Prospective investors are also encouraged to ask for a prospectus, financial statement or other similar document before they even consider investing. Investors should make sure they understand the terms thoroughly before signing any kind of document. They should also always demand official receipts in the name of the corporations or entities they are dealing with.

As the country’s commodities and futures exchange remains closed, the SEC has warned the public against engaging in foreign currency trading unless investors fully understand the mechanics or dangers of currency trading.

The SEC has likewise asked the public to avoid seminars that promise high returns with no explanation of risk, and that promise access to secret or exclusive techniques for building wealth.

As the primary regulator of the country’s capital markets, the SEC strictly enforces its rules and regulations to prevent fraudulent acts and similar activities. To date, the commission has issued several cease and desist orders to companies that were involved in illegal securities transactions and caused the closure of boiler room operators that used the country as a base for their illegal activities.

A Scams Hotline was established in the SEC to enable the public to report spurious activities. This has helped the Commission track down and stop the operations of pseudo-investment firms. The hotline numbers are 7258260 and 7253418.

SEC said the public should learn to invest wisely since the commission does not have the capacity to oversee and regulate the entire investing public.

With the need to earn extra money becoming increasingly urgent, various investment proposals are dangled before the public, promising big and quick bucks with little or no effort on the investors’ part.

The SEC said the public should be wary of schemes that are based primarily on paying commissions for recruiting new participants into the program, that promise sky-high returns in a short period of time, and that offer home investment or employment opportunities.