The Securities and Exchange Commission issued a cease-and-desist order against One Team Global Solutions Inc. for selling securities not registered with the corporate regulator.
The SEC in a notice published on its Web site ordered One Team and its officers, directors, agents and representatives to stop from selling securities in the form of investment contracts until a registration statement was filed and approved by the SEC.
“The commission will institute the appropriate administrative and criminal action against any person or entities found to act as solicitors, information providers, salesmen, agents, brokers, dealers or like for an behalf of the subject corporations,” the SEC said.
One Team was registered with the SEC on February 2015 as a company engaged in the buying, selling, distributing and marketing of merchandise of every kind. It has an authorized capital stock of P1 million with office along Kamuning Road, Quezon City. The company, however, is not licensed to sell securities to the public.
Based on the investigation conducted by the SEC, One Team operates as a fraud and violated the Securities Regulation Code, which prohibits the sale of securities in the Philippines without prior registration and approval by the SEC.
Under One Team’s scheme, an investor will put in P2,500 into the company and receive in return a product package for reselling. The amount paid for the products are far from their fair market value.
An investor can get higher profits if he recruits two investors as downlines. They serve as supports to recruit additional downlines until 15 slots are filed that resembles a pyramid.
The SEC explained that pyramiding was a form of investment taking and a variation of the Ponzi scheme. This is typically masked as a multi-level marketing in which participants profit primarily through recruiting other people.
This means the funds invested by the downlines, often referred to as joining fee, are used to pay the “uplines”.
The SEC has been going after companies engaging in pyramiding scheme. Last month, the regulator issued a cease-and-desist order against EmGoldex, an online investment scam that has victimized mostly migrant Filipino workers.