The Securities and Exchange Commission (SEC) said it has made permanent its order for Wellcons Unlimited Systems Inc. to stop offering investment packages to the public without the necessary license from the agency.
The SEC said it would proceed with the revocation of the certificate of incorporation of Wellcons through an order dated July 5, for illegally soliciting investments from the public through a “double-your-money” scheme.
In a resolution, the SEC denied the motion of Wellcons to lift the June 23 cease and desist order (CDO) issued against the company for soliciting investments from the public in the guise of health products.
Wellcons offered investment packages worth P2,500 to P13,890 under its invented binary system, with guaranteed returns of P9,000 to P32,000 per day.
Investors could further earn from Wellcon’s Pangkabuhayan Program, where they could supposedly double their money within 6 months by availing of investment packages worth P1,500 to P5,000. In addition, Wellcons promised leadership bonuses and referral fees, among others.
Wellcons’ investment scheme involved securities, particularly an investment contract, in which a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC’s Enforcement and Investor Protection Department (EIPD).
While Wellcons is a corporation registered with the SEC, it had never secured a secondary license from the agency to operate as a broker or dealer of securities, nor is it a registered issuer of any securities.
In its motion to lift the CDO, Wellcons argued, among others, that its business consisted mainly of the sale of health products, which were distributed to the consuming public through the various packages, with different subscription amounts.
“The complaints which the EIPD submitted in evidence show that member-investors actually purchased investment packages with the guaranteed returns, rewards and monthly earnings as their main consideration for parting with their hard-earned money,” the SEC said.
The agency cited the sales invoice that Wellcons itself submitted in evidence. It observed that there was nothing in the sales invoice that will show that the payor purchased Wellcons products, and that the sales invoice rather confirmed the sale or offer of investment packages by Wellcons, as stated in its advertising material which is published or posted online.
“More importantly, the foregoing shows that the allegations and evidence presented by Wellcons are replete with admissions that the packages that were offered and sold to the public were investment contracts because its investors actually bought the same primarily because of the returns/earnings that were promised, and not because of the products,” the SEC said.
“Under this scheme, member-investors of Wellcons clearly had a stake in the operations of the company in the sense that they profited and/or stood to profit in the continued sale of the investment packages.”
The SEC issued an advisory against Wellcons as early as February 2, to warn the public against investing in the group and similar entities.