SEC warns against three entities soliciting investments

By Keren Concepcion G. Valmonte, Reporter

THE Securities and Exchange Commission (SEC) has issued advisories against three entities offering unlicensed investment programs to the public.

In two advisories dated Jan. 4, the regulator flagged TuneGaga and OUTRACE “Play to Earn” for soliciting investments without authority from the SEC.

The regulator warned that the schemes offered by the two entities resemble a Ponzi scheme, “which is fraudulent and unsustainable, is not a registrable security.” Investments of newer investors are used to pay off “fake profits” of those part of the scheme earlier.

TuneGaga is not registered with the commission and it also does not have the license to offer investments to the public. The commission said it is luring investors through social media and through their independent website, which no longer works as of writing.

“TUNEGAGA/TuneGaga is a mobile application that can be downloaded in Google Play Store,” the SEC said in its advisory dated Jan. 4.

Users of the mobile application can allegedly earn extra income by just listening to music of their own choice. TuneGaga’s investors can supposedly earn weekly through its various subscription plans “with corresponding tasks.”

BusinessWorld reached out to TuneGaga for comment, but it has yet to receive a response as of press time. According to user comments of its app on Google Play, users have been experiencing problems on the app since late November.

Meanwhile, the SEC said OUTRACE is being run by another SEC-flagged entity, BCPay Financial Technology, Inc.

The regulator said OUTRACE is promising high returns for its players and “OUTRACE $ORE” token holders via acquiring its in-game non-fungible tokens (NFT) while on pre-sale and through initial coin offering for a cheaper price.

OUTRACE is luring investors “on the pretext that both will considerably increase in value once the $ORE is listed on public exchanges.” However, the entity is not registered with the SEC. It is also not licensed to solicit investments and it does not have the appropriate registration to offer or sell securities to the public.

OUTRACE is not registered with the Bangko Sentral ng Pilipinas (BSP) and it also does not have a certificate of authority as a money service business (MSBs) as required under the Guidelines for Virtual Asset Service Providers of the BSP.

“Likewise, its name does not appear among those listed as registered MSBs as of January 2021 with the Anti-Money Laundering Council under the Anti-Money Laundering Act, as amended,” the SEC said its advisory against OUTRACE dated Jan. 4.

On the other hand, UP-Mass Innovative Marketing Corp. or UMIM Corp. was also flagged by the commission for its unauthorized investment solicitation activities. Its program has members “invest, wait, and earn without having to do anything.”

“It has come to the attention of the commission that purportedly, [UP-MASS Innovative Marketing or UMIM] has acquired MassDrop and MDM Ventures Corp. and those who invested with the two corporations are being offered three options under the ‘transition’ program,” the commission said.

The SEC recently revoked the registrations and the certificates of incorporation of MassDrop and MDM Ventures after being found that their unlicensed investment programs also resembled a Ponzi scheme.

While UMIM is registered with the SEC, it does not have the required secondary license. Its articles of incorporation also explicitly state that the entity should not collect or take investments from the public nor shall it issue investment contracts.

The SEC is calling on the public to report any information on the operations of the three entities.

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