SEC Chairman Lilia R. Bautista said the agency’s Compliance and Enforcement Department has made permanent the cease-and-desist order issued to H-Factor to prevent the company from further soliciting investments from the public.
H-Factor was found to have sold unregistered investment contracts, which guaranteed a monthly interest of eight to 18 percent for a minimum placement of P50,000.
Under the Securities Regulation Code, no security may be issued to the public without a registration statement duly filed with the commission.
Bautista said the company has promised to return all the money to its investors to show good faith.
H-Factor was formed in July 2002 by siblings Leo Alvin Hadi and Leo Andreau Hadi.
Records show that the company has collected at least P350 million from various investors.
To make them accountable for their actions, the SEC filed before the Department of Justice a criminal complaint against the responsible officers of H-Factor. The penalty for src violation is seven to 21 years in jail.
The filing of the complaint came following a raid conducted by the SEC on the offices of H-Factor in Sta. Rosa and Biñan, Laguna in March.
The SEC began its investigation into H-Factor last November, following queries from the public on the legality of operations of the company. Investors also complained about the company’s failure to pay promised interests.