Regulator issues cease-and-desist order against mining firm
By Arra B. Francia
Securities and Exchange Commission | Philippines
THE Securities and Exchange Commission (SEC) has issued a cease-and-desist order against Alabel Maasim Mining Corp. (ALMAMICO), Alabel-Maasim Small Scale Mining Cooperative and/or Alabel Maasim Credit Cooperative (ALAMCCO) for its illegal solicitation of investments from the public.
In a statement issued yesterday, the corporate regulator said its Enforcement and Investor Protection Department found substantial evidence proving the group has been offering and selling public securities through investment contracts without a secondary license from the commission.
The groups, which are operating in Sarangani, General Santos City and Koronadal City, have allegedly been inviting members to invest certain amounts with the promise of a 35% monthly return. The returns will then be compounded with the capital if investors agree to lock in their investments for a year.
These investments are offered to the public through videos posted online.
“(ALMAMICO, ALAMCOO) their partners, officers, directors, agents, representatives, and conduits, assigns and any person claiming and acting for and on their behalf are hereby ordered to immediately cease and desist under pain of contempt, from engaging in activities of selling and/or offering for sale of securities in the form of investment contracts,” the commission en banc said in a June 4 ruling.
The SEC highlighted that ALMAMICO is registered only as a stock corporation, but its articles of incorporation explicitly state that it is not authorized to enter into businesses that require a secondary license such as acting as broker or dealer in securities, investment house, and close-end or open-end investment company.
Meanwhile, ALAMCCO is registered only with the Cooperative Development Authority. ALMAMICO’s incorporators are the same as ALAMCCO’s cooperators and directors. They also share the same principal office address.
Citing Section 8.1 of the Securities and Regulation Code, the commission said 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 Commission.”
The SEC added that ALMAMICO and ALAMCCO resemble a Ponzi scheme, or an investment fraud where the promised returns to investors are paid out through funds coming in from newer investors.
The commission also instructed the groups to stop transacting business involving the funds in their depository banks. They were also cautioned against transferring, disposing, or conveying in any other manner all related assets to reserve them for the benefit of investors.
The SEC previously warned the public against ALMAMICO and ALAMCCO in an advisory last April 30, on the back of inquiries and concerts regarding their investment activities.
Source: Business World