The Securities and Exchange Commission (SEC) has canceled the corporate registration of Silverlion Livestock Trading Corp. for soliciting investments from the public without the requisite license from the Commission.
In an order dated January 5, the SEC Enforcement and Investor Protection Department (EIPD) revoked the certificate of incorporation of Silverlion for violation of Section 44 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines (RCC), in relation to Sections 8.1, 26 and 28.1 of Republic Act No. 8799, or the Securities Regulation Code (SRC), Section 6(i)(2) of Presidential Decree No. 902-A, and Section 179 (j) of the RCC.
Silverlion’s activities constituted serious misrepresentation as to what it can do, to the great prejudice of or damage to the general public, a ground for the revocation of a corporation’s certificate of registration under Presidential Decree No. 902-A, according to the order.
This is in addition to the fact that Silverlion does not have the required secondary license from the Commission to offer or sell securities to the public, the department noted in the order.
Section 8 of the SRC provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.
Meanwhile, Section 26.3 of the SRC states that it shall be unlawful for any person, directly or indirectly, in connection with the purchase or sale of any securities, to engage in any act, transaction, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
Section 28 further adds that no person shall engage in the business of buying or selling securities in the country 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.
Investigations by the EIPD and SEC Zamboanga Extension Office revealed that Silverlion had been offering and selling investment packages to the public with guaranteed returns of 35% within just 15 days. With this, investments ranging from P1,000 to P100,000 could yield returns worth P1,300 to P130,000, respectively.
Silverlion’s scheme involves securities, particularly an investment contract, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the EIPD.
As a form of security, investment contracts must be registered with the SEC before they can be sold or offered within the Philippines, pursuant to Section 8 of the SRC.
“The scheme being offered by Silverlion Livestock Trading Corp.…promising a return of 2.3% per day or 35% after 15 days has the characteristics of a Ponzi scheme. Such scheme is prohibited under Section 26 of the SRC,” the order read.
“The investment scheme of [Silverlion] also operates to defraud investors as it deceives the investing public by making it appear that they have the authority to deal in securities.”
The revocation of Silverlion’s corporation registration followed the successful implementation of a search warrant against Silverlion by the combined forces of SEC ZEO and NBI last year, where they were able to seize bundles of cash, vouchers, and other devices that were allegedly supposed to be used for the upcoming payout of profits to its existing investors.
The Commission subsequently filed a criminal case against Silverlion before the Department of Justice on December 2, 2022, implicating its chief executive officer Ryan Cagod Ladoing, incorporator Renan Lara Ladoing its officers and agents identified as Rosemarie Alvarez Guzman, Neña Ewayan Algoy, John Paul Dellara Lopez and Michael Villalobos Berja.
While charges have been filed against Silverlion Livestock Trading Corporation and its officers and agents, its incorporators Ryan Cagod Ladoing and Renan Lara Ladoing remain at large.
The SEC on November 17, 2022 issued a cease and desist order against Silverlion, ordering the group to stop its investment solicitation activities for the benefit of the public.