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Saturday, August 24, 2019
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SEC warns public against 22 ‘investment scams’

(SunStar file)

KAPA-Community Ministry International Inc. is not the only entity that the investing public needs to watch out for.

According to an advisory issued by the Securities and Exchange Commission (SEC), there are various unregistered investment entities that entice the public to invest their money in high-earning products.

Many of them are reaching out to prospective investors through social media.

“Investors are increasingly turning to social media, including Facebook, YouTube, Twitter, LinkedIn and other online networks for information about investing,” SEC warned in an advisory issued on May 31, 2019.

It noted that investment companies have begun soliciting investments through social media and warned the public to be on guard.

The SEC identified the companies MGA Business Enterprises, Coophub Multimedia Services, Jogle Innovative Marketing, Global Dream Zion, Grappler, Sherpan, BCT Marketing/BCT Motorcycle and Car Trading, RTM/RTM Pharmacy and General Merchandise, Diamond Marketing, Fusion Marketing, FMarket, Cirfund, Vibearn, Onepro, BCC/BCC Cosmetics Trading, Unlishop Compensation Plan Marketing, VUCC, Bitrain, Tcoin, Crowd Royals, ADA Farm Agri Venture and Nermie Marketing/Nermie Health and Beauty Products Trading as those soliciting investments through social media.

The SEC noted that the entities mentioned offer investment contracts in Facebook pages or secret Facebook groups and chatrooms.

They also reportedly offer “unrealistic return on investments,” ranging from 10 percent to 400 percent a month and require interested investors to pay initial investments by depositing their money to an account in a bank, Coins.ph, GCash, money remittance company or face-to-payment with an entity’s agent. Investors are then instructed to send through private message copies of proof of their deposits. Payouts are also made using the same methods.

Subject to SEC regulation

“They usually claim that they invest their funds in forex (foreign exchange), bitcoin and other cryptocurrencies to justify their earning capacity,” the SEC said.

The Commission added that such investment schemes “collapse as fast as they are created,” leaving investors unable to recoup their investments.

The SEC wants it known that such schemes, whether using money or cryptocurrency, are considered securities and subject to regulatory authority of SEC. It added that the recruitment of investor members “in the guise of sponsoring a person into the system” is also considered a form of investment solicitation or a sale of securities.

The sale of securities to the public without a permit or license from the SEC is a violation of the Securities Regulation Code.

To spot such investment scams, the SEC lists three common red flags to look out for.

If it sounds too good to be true, the SEC warns that it probably is. It cautioned investors to be wary of claims of “incredible gains” or “huge upside and almost no risk” investments.

The SEC also noted that such scams promise guaranteed returns. It warned that every investment entails some level of risk and that an investment that is 100 percent safe likely has low returns.

“Most fraudsters spend a lot of time trying to convince investors that extremely high returns are guaranteed or that the investment is a can’t-miss opportunity,” the SEC said.

Another red flag is the pressure to buy right away. The SEC encourages investors to think before investing and be skeptical of investments that are pitched as once-in-a-lifetime opportunities. The SEC encourages the public to consult its Enforcement and Investor Protection Department if they think they are being duped into an investment scam.


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