Criminal raps to be filed vs Kapa Ministry — SEC

Robie de Guzman   •   June 11, 2019   •   3462

MANILA, Philippines – The Securities and Exchange Commission (SEC) is set to file criminal complaints against the officials of Kapa Community Ministry International for allegedly operating a fraudulent investment scheme.

SEC Chairman Emilio Aquino said Kapa Ministry solicited what it called “donations,” promising returns as high as 30 percent per month although it did not have the appropriate secondary license for investment products.

The SEC said that based on their investigation, Kapa promised its members billions of pesos in returns, but its assets cannot back up such claims.

SEC records show that Kapa, which is short for Kabus Padatuon (Enrich the Poor), registered as an independent religious organization in March 2017 indicating its headquarters in Bislig City, Surigao del Sur.

But several days after its registration, the SEC issued an advisory against Kapa for unauthorized solicitation of investments.

In October 2018, the SEC issued another advisory for the same reason while in February 2019 a cease-and-desist order was issued against Kapa.

Aquino said they held back from taking action against Kapa due to court injunctions and its operation as a religious group.

Last June 4, the Court of Appeals (CA) ordered the freezing of several bank accounts and other assets linked to Kapa upon the petition of the SEC and the Anti-Money Laundering Council.

Its founder, who identified himself as Pastor Joel Apolinario, denied the allegations while insisting that the sole aim of the organization was to help the poor.

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SEC orders ALMAMICO, ALAMCCO to stop Ponzi-like investment scheme

Robie de Guzman   •   July 3, 2019

MANILA, Philippines – The Securities and Exchange Commission (SEC) on Wednesday ordered Alabel Maasim Mining (ALMAMICO) Corp., Alabel-Maasim Credit Cooperative (ALAMCCO) to stop soliciting money through the Ponzi scheme and without the necessary license.

The SEC said a cease and desist order was issued by the Commission En Banc on June 4, directing ALMAMICO and ALAMCCO to stop engaging in offering and selling to the public securities in the form of investment contracts without the necessary license from the agency.

The said entities operate largely in Sarangani, General Santos and Koronadal Cities, enticing members to invest their money in exchange for a 35 percent monthly return which is supposedly compounded when investors lock in their investments for a year.

According to the SEC, the scheme satisfies the elements of an investment contract, including the placement of money, the money invested is placed in a common enterprise, expectation of profits, and the generation of expected profits from the entrepreneurial and managerial efforts of others.

“ALMAMICO and ALAMCCO were also found to have engaged in public offering of securities when they indiscriminately or randomly promoted their investment schemes through videos posted online,” the agency said in a news release.

The SEC said that under Section 8.1 of Republic Act No. 8799, or the Securities Regulation Code, “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 commission also noted that aside from operating without license, the investment scheme of ALMAMICO and ALAMCCO also resembles a Ponzi scheme, which is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new members.

The SEC has ordered the group’s officials and partners to stop promoting the scheme, and immediately delete the promotional videos from the internet.

Those who have invested in the said companies are also advised to contact the SEC offices in Davao City and Cagayan de Oro City.

President Rodrigo Duterte had previously ordered agencies to launch a crackdown on companies that offer ‘too good to be true’ investment schemes.

Last May, hundreds of ALAMCCO members gathered in Sarangani to protest against the government crackdown, insisting that their investment scheme is not a scam.

Too good to be true — Duterte on investment scams

Aileen Cerrudo   •   June 14, 2019

President Rodrigo Duterte again urged the public not to join any investment scheme operations reportedly similar to Kapa Community Ministry.

“If it is too good to be true, then it is really wrong,” he said. “Maniwala kayo sa akin kasi abogado ako, presidente niyo ako. Kung kung totoo pa iyan, porbida ako na magsasabi ‘sige’ pati ako sasali na. Huwag kayo pumasok diyan, panloloko iyan (Believe me because I am lawyer, I am your president. If it were legitimate, I would be the first to say yes; I’ll even join one. But it’s a scam, so don’t enter into one).

“I’m sorry. The operation will be stopped or shall stop immediately,” he added.

The chief executive also reiterated his order to stop the operation of Kapa Community Ministry and the arrest of the officials as well as its founder.

“Ang sinabi ko sa NBI at police, hulihin. Kasi iyang estafa sa batas natin na ginawa ng Congress, large scale estafa in non-bailable, hindi ka makakapyansa. (I told the NBI and police to arrest [the officials]. Because that is large scale estafa which is non-bailable)” he said.

Duterte also warned the members of Kapa that they might get arrested if their names were listed as members of the organization.

Meanwhile, Kapa Community Ministry Official Lecturer Rene Catubigan insists that their group is not an investment scheme.

“Pumirma po kasi ang member ng deed of donation kaya I would like to correct the term na hindi po investment ang kanilang inilaan kundi donation. Iyong interes hindi namin tinatawag na interes iyon kasi ang tawag naming doon ‘love gift’ or ‘blessing’ (The members signed a deed of donation so I would like to correct the term. It is not an investment but a donation. The interest is not called an interest but a ‘love gift’ or ‘blessing’),” he said.

Kapa members held a prayer rally on Thursday (June 13) in General Santos, however, founder Joel Apolinario did not attend due to fear of arrest.—(with reports from Janice Ingente)

SEC is scrutinizing overnight blockchain companies: chairman

UNTV News   •   January 24, 2018

FILE PHOTO – Hard disks are pictured inside a server room at a company in Bangkok, Thailand, April 5, 2016. REUTERS/Athit Perawongmetha/File Photo

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) is scrutinizing public companies that change their name or business model in a bid to capitalize upon the hype surrounding blockchain technology, SEC Chairman Jay Clayton said on Monday.

Dozens of little-known companies across the globe have seen their share prices leap in recent months after unveiling plans to enter the bitcoin industry or that of its underlying distributed ledger blockchain technology.

In December, the SEC temporarily suspended trading in the shares of Crypto Company (CRCW.PK), a small firm that saw its stock rise more than 2,700 percent after signing a deal to buy a cryptocurrency data platform.

Clayton warned that it was not acceptable for companies without a meaningful track record in the sector to dabble in blockchain technology, change their name and immediately offer investors securities without providing adequate disclosures around the risks involved.

“The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering,” he told a conference on Monday.

The chairman also said the SEC had seen “disturbing” evidence that legal professionals have been wrongly counseling clients that initial coin offerings, whereby cryptocurrency start-ups solicit funds from investors who receive tokens in return, do not need to comply with federal securities law.

The SEC has previously said that such fundraisings should comply with securities law and has warned investors more broadly over the risks of cryptocurrency fraudsters.

“I have instructed the SEC staff to be on high alert for approaches to ICOs that may be contrary to the spirit of our securities laws and the professional obligations of the U.S. securities bar,” Clayton said.

Reporting by Michelle Price; Editing by Marguerita Choy

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