SEC issues CDO versus ETXT Business Solutions

The Securities and Exchange Commission (SEC) has issued a cease-and-desist order against ETXT Business Solutions Inc. for unauthorized sale of investment contracts to the public.

Based on the investigation conducted by the SEC’s Compliance and Enforcement Department, ETXT has been offering a guaranteed rate of return for investments of $1,000 to $5,000.

According to the CED, the investment contracts offered by ETXT falls under the definition of securities that need prior registration from the SEC before they are sold to the public.

Under ETXT’s investment scheme, investors may choose among three different entries which have a corresponding package containing different products or benefits.

In the classic dealer entry, investors will earn every week for a period of 30 weeks; $62.5 for an investment of $1,000; $187.50 for a $3,000 investment; and $312.50 for the $5,000 entry.

Under ETXT’s so-called dealership agreement, once the dealer invests in the corporation, he or she will have a guaranteed share in the profit of the company for the period provided in the contract.

ETXT also uses a binary and uni-level program where investors receive a direct “referral incentive” per person who becomes his or her downline. If there is a pairing among the downlines, said investor receives an additional pairing incentive.

According to the CED, ETXT conducted business operation seminars at its office wherein prospective investors were invited to become dealers of the corporation.

The company was also found to have solicited investments from the public through the Internet.

ETXT was organized on April 3, 2007 primarily to engage in the business of trading of goods such as prepaid cards and general merchandise on wholesale/retail business.