The Securities and Exchange Commission (SEC) has filed before the Justice Department a criminal complaint against several officers, directors and agents of foreign exchange trading firm Performance Investment Products Corp. (PIPC) for the fraudulent sale of securities to the public.
Among the respondents to the case are PIPC’s Singaporean owner Michael H.K Liew, directors Cristina Gonzalez Tuason and Cristina Jurado, and sales people Eugene Go, Pamela Morris, Michael Nubla, Luis Aragon, Mayenne Carmona, Anthony Kierulf, Renato Sarmiento Jr., Barbara Garcia, Jonathan Ocampo, Deborah Yabut, Victor Jose Vergel De Dios, David Chua-Unsu, Stanley Chua-Unsu, Nicole Ortega, Oudine Santos, Mia Legarda, NIcoline Mendoza, Christine Yu and Herly Hesuitas.
Liew, however, is in hiding and can no longer be located, leaving behind losses of investors reportedly amounting to between $140 million and $250 million.
In its complaint, the SEC’s Compliance and Enforcement Department said PIPC and respondents sold securities to the public in violation of the Securities Regulation Code.
“This case stems from the act of fraud and chicanery masterfully orchestrated and executed by the officers and agents of PIPC against their unsuspecting investors. The deception is founded on the basic fact that neither PIPC nor its officers, employees and agents are registered brokers/dealers, making their numerous transactions of offering and selling securities to the public a blatant violation of the provisions of the src, specifically Sections 8 and 28 thereof,” the CED said.
According to the CED, PIPC’s illegal sale of securities in the form of the portfolio management partnership agreement was “perpetrated for about nine years and would have continued were it not for the alleged and most probably deliberate withdrawal of the entire funds of the corporation by Liew.”
The fraud was masked by a supposed offshore foreign currency trading scheme promising an annual rate of return of 12 percent to 18 percent, the CED said.
However, losses from foreign exchange trading shall be shouldered by the investor to the extent of 30 percent of total invested funds.
According to the CED, PIPC investors are given the option to pay the minimum amount of $40,000 either in cash to their agent or to PIPC’s head office or remit the money directly to the company’s offshore account usually in ABN-Amro Bank or Standard Chartered Bank.
“Fully convinced and enamored with the thought of earning higher rates of interest along with the promise of a guaranteed principal, the investors placed and entrusted their money to PIPC only to find out later that they had been deceived and taken for a ride,” the SEC said.
“It could not be denied that profits arose principally from the exertions of others, particularly the efforts of PIPC Corp. and its alleged battery of conservative expert of foreign currency traders abroad. It was PIPC that conceptualized and packaged the program including the entitlement to the benefits. Indubitably, complainants-investors relied wholly on the representations and enticements of respondents.
Failure to comply with the securities law will result in the imposition of a fine of not less than P50,000 nor more than P5 million or imprisonment of not less than seven years nor more than 21 years or both in the discretion of the court.
SEC sources said the ones who operated PIPC are the same ones behind Performance Foreign Exchange Corp. which was issued a cease and desist order by the SEC in 2001 but was later on lifted after the Supreme Court overruled the SEC.
The CED received a complaint against PIPC as early as last year for soliciting investments from the public without the necessary license. PIPC, however, was cleared and was just sanctioned for non registration under the Foreign Investment Act.