SEC Facebook

This Advisory is prompted by reports received by the Commission on the illegal
investment-taking activities of several individuals offering “DYMs” or Double Your
Money schemes.
Based on information gathered, reports received and Facebook posts, several
individuals from Davao are apparently proliferating several investment taking schemes
all of which promise lucrative returns as far as doubling the investor’s money in just
one month.
The individuals or entities proliferating this investment-taking scheme do not
have a real business model to back up the profits that are going to be given to
prospective investors. Essentially, the income generated from the foregoing
investment-taking scheme depends on the number of referrals, membership fees
and/or prior investments received by the entities. The investment-taking schemes
proliferated by these individuals has the characteristics of a “Ponzi Scheme” where
the ‘income’ given to the initial investors are taken from the subsequent investors. This
business model is unsustainable and will inevitably result in the demise of the business
which directly results in the prejudice of the investors.
The Davao Extension Office of the Commission has previously posted an
advisory against the said individuals and/or entities, giving a warning to the public to
be wary of such investment-taking schemes. To wit:
Applying the Howey Test,1 the investment-taking schemes employed by these
entities or individuals are in the nature of “investment contracts” as they involve the
offering and sale of securities to the public where investors need not exert any effort
other than to invest or place money in its scheme in order to earn profits.
Therefore, entities proliferating such investment-taking schemes must be duly
registered with the Commission and that any person or entity intending to offer and
sell its investment contracts are required to secure the necessary registration and/or
license from the Commission as provided under the Securities Regulation Code.
Entities or corporations that offer securities to the public that lack prior
registration with the Commission makes its activities illegal for lack of the necessary
licenses and authority from the SEC.
Hence, the public is advised NOT TO INVEST or STOP INVESTING in any DIY
or Double Your Money investment-taking schemes offered by individuals or entities
who operate without the necessary licenses and/or authority.
Accordingly, the Commission warns all unscrupulous individuals and/or entities
that strict penalties are imposed for violations of the Securities Regulation Code,
the Revised Corporation Code, and such other rules and regulations enforced
by the Commission.
Those who act as salesmen, brokers, dealers or agents of such unauthorized
entities like the operators of the individuals who are operating in Davao in selling
or convincing people to invest in their investment scheme offered including
solicitations and recruitment through the internet may likewise be criminally
prosecuted and penalized with a maximum fine of Five Million pesos (P5,000,000.00)
or a penalty of Twenty-one (21) years of imprisonment or both pursuant to Sections
28 and 73 of the SRC.
The names of all those involved will also be reported to the Bureau of Internal
Revenue (BIR) so that the appropriate penalties and/or taxes be assessed
correspondingly.
Should you have any information regarding any investment solicitation activity
by any individual or group of individuals who propagate DYMs or Double Your Money
schemes, please send your report to the EIPD at epd@sec.gov.ph.
For the guidance of the public.
Pasay City, 31 March 2022.