MANILA, Philippines – Gold trading company Goldxtreme said it would exhaust all legal means to ensure the cease-and-desist order recently issued by the Securities and Exchange Commission (SEC) against the company would be lifted.
In a statement yesterday, Goldxtreme said it has repeatedly tried to explain and outline the legitimacy of its business. Despite this, the SEC issued the CDO this week against Goldextreme and two other alleged Ponzi firms.
The order forbids the company from “engaging in activities of selling and/or offering for sale securities in the form of investment contracts or any other of the same nature until the requisite registration statement is duly filed with and approved by the Commission and the corresponding offer/sell is issued,” a charge which Goldxtreme has denied.
Nevertheless, the company said it would abide by the order and would temporarily suspend its Gold Swap Program (GSP).
“The company profusely apologized to all its GSP patrons for this inconvenience, and assured that it shall take all necessary legal actions to have the CDO lifted and resume its normal operations,” it said.
However, the company would continue to sell 14-karat mini gold bars but due to the effects of the CDO, prices for these have to be adjusted upward.
“The Company’s office shall be open for these transactions and for addressing any inquiries or concerns from its customers,” it said.
The SEC issued three new CDOs including one against Goldxtreme. The two others are Success200 International Marketing Corp. and Grandtime Automobile Inc.
In the case of Goldxtreme, the SEC said the trading company invites people to join and invest. Investors are required to pay P5,000.00 as initial investment and they will be placed in a table of orders. The table of orders comprise 15 slots which will in turn be filled up by new recruits. When the table of orders is filled up, the investors will then exit and they will earn P25,000, with a 10 percent withholding tax.
This, the SEC said is a classic “Ponzi scheme.”
“A Ponzi scheme is a type of investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Its organisers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the perpetrators focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business. It is not an investment strategy but a gullibility scheme, which works only as long as there is an ever increasing number of new investors joining the scheme,” the SEC said.