SEC to revoke Lead license

The Securities and Exchange Commission (SEC) is now readying revocation proceedings against Lead Lending Corp. following complaints that the company continues to solicit investments from the public despite the cease-and-desist order (CDO) issued against it by the corporate watchdog agency.

Tomas Syquia, head of the SEC’s Compliance and Enforcement Department, said his unit has recommended the cancellation of Lead’s corporate license to further safeguard the interest of the investing public.

"We have already forwarded to the Office of the General Counsel our recommendation that revocation proceedings be instituted against the company," Syquia said.

Lead, whose principal office is located in Sucat, Parañaque, was issued a CDO in May this year for the unauthorized sale of securities to the public. Headed by its president Gaudencio Maximo, Lead solicited funds from more than 19 investors without prior registration with the SEC.

Citing Section 8.1 of the Securities Regulation Code, the SEC said no securities shall be sold or offered to the public without a registration statement duly filed with and approved by the commission.

Lead was also charged with violation of the Corporation Code for having engaged in acts beyond the scope of its authority. The firm was registered with the SEC as a lending investor in 1998.

The company has reportedly defrauded hundreds of unsuspecting investors of at least P100 million.

Under its scheme, for a minimum placement of P20,000 under a three-month period, investors are guaranteed a return of four percent interest a month. They are issued post-dated checks, representing the promised interest and their principal investment. The contract is renewable after the expiration of the term of the original contract.

In the past, the SEC had issued several cease-and-desist orders against companies such as Glasgow Credit and Collection Services Inc., Multinational Telecom Investors Corp. (Multitel) of Rosario Baladjay, the Mateo Management Group, the Tibayan Group and Five Vision Enterprises for illegally selling securities without proper registration.

Pseudo-investment firms offer unbelievably high interest rates and use high pressure sales techniques to entice the public to put in their hard-earned money.

Stepping up its drive against securities fraud, the SEC is now cracking down on pseudo-investment companies operating in the provinces. Most of the pseudo-investment firms which had been apprehended by the SEC or have yet to be uncovered, appeared to have shifted to the provinces to continue their illegal activities without the prying eyes of authorities.

Pseudo-investment firms reckon they would be able to attract more investors in the provinces as there is less information available against dubious investment schemes.