THE Securities and Exchange Commission (SEC) has ordered Wellcons Unlimited Systems, Inc. once again to stop offering investment packages to the public without the necessary license from the commission.
The SEC’s order dated July 5 comes after the commission on June 23 directed Wellcons to immediately cease engaging in the unlawful solicitation, offer, and sale of securities until it has filed the required registration statement and secured the necessary approval from the commission.
Wellcons and all the people and subsidiaries involved under the name have been ordered to stop their investment solicitation activities and immediately cease their internet presence related to the unauthorized investment scheme.
They have also been prohibited from transacting any business involving funds in Wellcons’ depository banks, and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets of the investors.
The cease-and-desist order was issued after the SEC’s Enforcement and Investor Protection Department found that Wellcons has been offering investment packages worth P2,500 to P13,890 with guaranteed returns of up to P9,000 to P32,000 per day.
Members who availed of investment packages can further earn through Wellcon’s Pangkabuhayan Program, where they can supposedly double their money within six months based on investment packages worth P1,500 to P5,000.
Aside from these investment packages, Wellcons also promised leadership bonuses and referral fees to its members.
“[I]t is clear that Wellcons’ business model which promises high return of investments is not sustainable, and can only be carried out as long as new investors continue to come in,” the commission en banc said.
The scheme involves the sale and offer of securities to the public in the form of investment contracts, whereby a person invests money in a common enterprise and is led to expect profits primarily from the efforts of others.
SEC finds this scheme a violation of Section 8 of the Securities Regulation Code (SRC) because Wellcons has no license to carry out sales or offers of securities. Although the company is a duly registered corporation, it has never secured a secondary license from the commission to operate as a broker or dealer of securities, nor is it a registered issuer of any securities.
The SRC provides that securities should not be sold or offered for sale or distribution within the Philippines without a registration statement duly filed with and approved by the SEC.
“This is a fraudulent scheme which will likely cause grave or irreparable injury or prejudice to the investing public. Thus, we hold that the act of Wellcons in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the commission added.
As early as Feb. 2, the SEC sent an advisory to Wellcons in order to warn the public against investing in the group and similar entities.
Wellcons registered with the commission on April 19, 2021 with a primary purpose of distribution of products through multi-level marketing, buying and selling, and marketing through online channels, as permitted by law, goods and merchandise that primary target the basic needs of individuals and households.
BusinessWorld tried to reach out to Wellcons via Facebook pages under its name and a phone number attached to one of the pages but has not received a reply as of press time. — Justine Irish DP. Tabile