SEC revokes corporate registration of 2 entities

The Securities and Exchange Commission (SEC) has canceled the corporate registrations of Koen Solutions OPC and Phil Maritime and Ocean Institute of Technology Inc., for illegally soliciting investments from the public.

In an order dated November 28, the SEC’s Enforcement and Investor Protection Department (EIPD) revoked the registration of Koen Solutions as a one-person corporation for violation of the Securities Regulation Code.

The EIPD noted that only securities that have been registered with the SEC through a filing of a registration statement and its subsequent approval may be offered or sold within the Philippines.

Investigations by the EIPD showed that Koen Solutions has been inviting the public to invest in its app for a guaranteed daily income of 2.5 percent to 3 percent or monthly income of 75 percenr to 90 percent, depending on the “financial trading robots” that they choose to invest in. The robots supposedly search for and trade cryptocurrencies that could bring stable profits to investors.

The SEC has issued an advisory against Koen Solutions as early as September 9 directing the group to stop soliciting investments from the public until it has secured the necessary license to do so.

The group continued to sell and offer investments to the public, claiming on social media that it has submitted the necessary documents for the application of a secondary license to the SEC.

“Considering that nowhere is it stated in its primary purpose that Koen Solutions OPC is authorized the engaged in the selling or offering for sale of securities to the public, the activity of Koen Solutions OPC, of selling, or offering for sale of investments is considered an ultra vires act, and therefore, constitutes serious misrepresentation,” the order read.

“These false representations of lucrative return of investment within a short period of time effectively lure the public to invest their hard-earned money to their company,” the order said.

The EIPD noted that the investment scheme appears to have the characteristics of a Ponzi scheme, which is defined as an investment fraud that involves the payment of purported returns to existing investors from funds contributed by the new investors.

In a separate order dated November 28, the EIPD also revoked the certificate of incorporation of Phil Maritime Ocean Institute of Technology (PMOIT).

Phil Maritime was found to be inviting the public to invest at least P350,000, in exchange for a 40-percent share in the school’s annual income potentially amounting to P206,000, or a quarterly income of at least P51,000. The school also promised a return on investment within a period of two years.

Profits will supposedly come from the school’s revenues, earnings from its training center, dormitory revenues and earnings from the school’s commercial center.

“It would appear that the promised profits and returns would be derived from the investments of [PMOIT]’s new member/investors. Necessarily, this scheme is unsustainable, as it must rely on a continuous inflow of new investors in order to make payouts to earlier investors, all the more made glaring considering that it has no actual operations yet to speak of,” the SEC said.

The SEC has likewise issued an advisory against PMOIT on September 13, advising the public to exercise caution when dealing with the group.

The investment schemes of PMOIT and Koen Solutions involve the sale and offer of securities to the public in the form of investment contracts, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.

The certificates of incorporation of Koen Solutions and Phil Maritime have been revoked, with such status caused to be reflected on the online database of the SEC.

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