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Friday, August 25, 2006
SEC warns Cebuanos against investment scams, bogus cos.
The Securities and Exchange Commission (SEC) Cebu is advising investors to be wary of investment scams.
SEC Cebu Extension Office Director Merly Cunanan said she has not received any complaints about “boiler room” operations in the province, although the commission’s central office posted online a warning against such investment scams.
“Boiler room” scam refers to the activity of certain individuals who try to peddle worthless shares of non-existent companies to unsuspecting investors.
“They pose as agents of companies abroad who try to solicit money with a promise of a high rate of return at the soonest possible time,” Cunanan said.
She is urging everyone to call the SEC office “when in doubt” so the commission can investigate on the matter “discreetly.”
Offer
According to Cunanan, if one comes across an investment offer by phone, e-mail, flyers, newspaper ads or in person, he or she should verify whatever information given “to protect yourself and your money.”
She said would-be investors should ask questions, such as name and address of the person, the company making the offer, landline phone number not that of a mobile phone which cannot be traced, and SEC registration.
She said a SEC company registration does not grant authority to sell investments, such as securities, bonds, commercial papers or similar financial instruments.
“A secondary license is needed to sell securities, solicit investments or accept deposits,” she said.
Registered
Only SEC registered persons and investment houses, and financing companies with quasi-banking license and with SEC registered securities are authorized to sell.
Cunanan said people should “not deal with anyone unwilling or hesitant to give any information.”
She also urged the public to report any business establishment “operating illegally” to the SEC-Compliance Monitoring and Enforcement Department, SEC-Cebu office, or seek the assistance of the National Bureau of Investigation or the police.
Boiler room is a slang term for shady enterprises. The term may have come from stock swindling operations housed in basement boiler rooms or some small office filled by individuals who try to sweet-talk people into giving up their money to invest in a bogus company.
According to its website, SEC has ordered the shutdown of several companies in Metro Manila that were found to be boiler room operations. (MMM)
For Bisaya stories from Cebu. Click here. (August 25, 2006 issue)
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