SEC-Davao warns public against schemes disguised as ‘digital marketing business’

By Antonio Colina IV

DAVAO CITY – The Securities and Exchange Commission (SEC)-Davao Extension Office has warned investors here to protect themselves from investment companies that are taking advantage of the coronavirus disease (COVID-19) pandemic to solicit and accept investments from the public online under the so-called “digital marketing business” schemes.

“Because of the pandemic, the Commission is anticipating financially difficult times ahead. The SEC-Davao Extension Office is reminding the public to protect your hard-earned money so you may have some for future use,” the SEC-Davao said in its advisory.

The agency advised the public to rely on official sources of information before making investments, encouraging them to visit its website to check on legitimacy of these companies, and keep themselves updated on the suspicious and entities that were recently added in its advisories.

The central office of SEC issued a cease and desist order (CDO) against CROWD1 Asia Pacific Inc. (CROWD), which claims to operate globally, for “soliciting and accepting investments from the public under a scheme disguised as a digital marketing business.”

In its order dated May 12, the agency said it has ordered the CROWD1 to “cease their internet presence relating to the transactions and investment scheme,” and would institute “appropriate administrative and criminal action against any persons or entities found to act as solicitors, information providers, salesmen, agents, brokers, dealers, or for and in behalf of the subject partnership.”

The agency warned the public that it would unsustainable to invest in companies that do not have a legal personality.

The Commission said the Securities Regulations Code provides that only registered companies could only solicit securities and other similar investment instruments after securing a “secondary license,” explaining that a certificate of incorporation does not constitute a license to solicit or accept investments from the public.

“The Commission finds that the foregoing investment scheme involves the sale and/or offer of securities in the form of investment contracts which require secondary license under the SRC,” it said.

The SEC-Davao said it has also received several complaints from the other areas within its jurisdiction, many of them coming from Davao Region, Soccsksargen, and Northern Mindanao.