The Securities and Exchange Commission on Friday issued a cease-and-desist order against EmGoldex, an online investment scam that has victimized mostly migrant Filipino workers.
The SEC said in a statement it also filed two complaints against EmGoldex and related units Global Intergold and Prosperous Infinite Philippines Holdings Corp. with the Justice Department for selling and offering securities not registered with the SEC.
The unauthorized sale is a violation of the Securities Regulation Code. The SEC said each violation of the SRC was punishable upon conviction, with a fine of not more than P5 million or imprisonment of seven to 21 years, or both.
The SEC said it initiated the filing of the cases and issued the cease-and-desist after several months of investigation on EmGoldex.
SEC director for enforcement and investor protection department Lalaine Monserate said Emgoldex and its related units operate the classic Ponzi scheme of getting cash investments and giving high return payouts through the recruitment of people.
As more people are recruited into the scheme, it eventually reaches a point where it can no longer sustain the payouts and payments are eventually stopped, leaving unsuspecting investors penniless.
The SEC with the help of Department of Interior and Local Government, Philippine National Police, National Bureau of Investigation and National Intelligence Coordinating Agency managed to gather evidence, including affidavits of two victims who are active PNP officials.
The corporate regulator in mid-February issued an advisory on investors to exercise self-restraint from putting their hard-earned money on Emgoldex.
An SEC investigation showed that EmGoldex had been inviting Facebook netizens to invest in its “Pinoy Style Patak Patak” program, which promises huge return for their investment.
Under the program, an investor shelling out P1,000 will supposedly earn profits from P5,000 to P10,000, while a placement of P35,000 will yield P180,000 to P360,000.
EmGoldex was the company that initially employed the Ponzi scheme. The company, however, renamed itself to GIG after the SEC issued the advisory against EmGoldex.
PIPHC was also incorporated sometime in August to aid and assist GIG investors who were unable to obtain a return on their investment.
EmGoldex has been banned in other countries based on international media reports.