Editorial: Keeping an eye on fast money schemes

IN RECENT months, we saw the rise of a number of investment schemes that promise high returns to those who invest money in them.

Here in Davao Region, the popular ones are the Rigen Marketing (Rigen) and the Kapa-Community Ministry International, Inc. (Kapa).

Kapa promises a return of 30 percent for the money you "donate," as they label it. Rigen guarantees a return of 400 percent in just 30 days less or more when you invest in them.

The Securities Exchange Commission (SEC) has issued an advisory and cease and desist order (CDO) against Kapa. However, Kapa continues to operate despite the CDO. A warning advisory against Rigen was just release on May 24, 2019.

The commission's reason for issuing an advisory to both was simple -- according to Republic Act No. 8799 or the Securities Regulation Code (SRC), both are selling securities without being registered to the SEC.

The SRC defines securities as "shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character."

Section 8.1 of the SRC clearly states 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."

In its advisory on Rigen, SEC warned the public that Rigen may turn out to be a fraudulent investment scheme for selling unregistered securities. The regulatory body has not released a CDO to Rigen.

As for Kapa, SEC revoked its certificate of registration of corporations as a religious organization and issued a CDO against it. Based on SEC's investigation, it was discovered that all the elements of an investment contract are present in Kapa's scheme. Hence, it violates section 8.1 of the SRC.

It further states that Kapa was registered as a religious organization and does not have "any secondary license to deal with securities."

If you look into the advisories closely, SEC is saying that if you will operate a firm that urges people to invest their money, you need to be registered to SEC. Be registered or face the full force of the law.

If Rigen and Kapa have good intentions to help the general public financial, why do they not want to follow the laws that are set by the government? There is nothing to fear if they have nothing to hide. If they want to get SEC off their backs, all they have to do is be a duly registered corporation with SEC that is allowed to offer and sell securities.

Whether they are receiving "donations" or utilizing forex and crypto-currency, in the eyes of the law, the two are operating as unregistered corporations without the appropriate license and permit to sell securities to the public.

However, the SEC did not directly state in its advisories for people to stop investing. Rather it invited those who invested money in either Regin or Kapa to report to them.

The government has no control over where we place our money. Instead of telling people to stop, the SEC did warn individuals to be careful where they put their hard-earned money. It is clear that many want to get rich or have more than what they are receiving right now. However, they should also think about where they put their money. It pays to be cautious where your money goes.


SunStar website welcomes friendly debate, but comments posted on this site do not necessarily reflect the views of the SunStar management and its affiliates. SunStar reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules:

Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent. Do not shout or use CAPITAL LETTERS!