DAVAO CITY — The Securities and Exchange Commission-Davao Extension Office (SEC-DEO) has alerted the public that JC Pro Global Trading does not have any legal authority to solicit investments.
The extension office made the announcement after the Commission raised an advisory on June 24 that the entity, headed by one Jameskie Earl Cornelio also known as Jaypee Halili, is engaged in investment taking activities through its ‘compensation plan (complan)’.
The Commission said that JC Pro Global Trading’s scheme “is an investment contract because it involves the offering and sale of securities to the public where their investors need not exert any effort other than to invest or place money in the scheme in order to earn profit.
An “investment contract” exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.
To engage in this kind of investment activity, JC Pro Global Trading must have a secondary license from the Commission and that any person or entity intending to offer and sell its investment contract are required to secure the necessary registration and/or license from the Commission as well.
The requirement is based on Section 3 of the Securities Regulation Code (SRC), which requires an entity to secure a secondary license if it wants “to solicit, accept or take investments/placements from the public or to issue investment contracts and other forms”, and Section 28, which provides that “no person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered as such with the Commission.”
The Commission said that based on reports that it has gathered, JC Pro Global Trading has a “system” “apparently designed to `take care of everything’ which include, trading, buying and selling of cryptocurrency which provides daily income and which provides daily income and a guaranteed profit of at least 200% in 20 days or double-your-money in 20 days which provides a no-risk investment because profits are assured.”
Based on its online posts, a basic “complan” requires an investment of P500 per account with a P50 income daily or P1,000 in 20 days. The investment can be between P500 and P100,000.
Aside from the profits of the account owners, they are also offered 50% direct commission from new accounts.
The entity is assuring its investors that its scheme is successful because its “system” will do the trading.
The Commission said the investment scheme of the entity is a “Ponzi Scheme” where the entity takes money from the public to allegedly invest it to generate high returns but in reality, merely pays the initial investors with the money paid by subsequent ones.
“This investment-taking scheme cannot be sustained and inevitably will result in the collapse of the business,” it added.
In the same advisory, the Commission also warned that it will impose penalties to those who have violated the SRC, the Revised Corporation Code, and such other rules and regulations that it is enforcing. Penalties can be up to P5 million or 21 years in prison, based on Sections 28 and 73 of the SRC.
Aside from facing possible penalties, identities of those who are involved will also be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and taxes be assessed. ###