THE Securities and Exchange Commission has made permanent the cease and desist order (CDO) against Casa Infini Builders and Realty Co. Ltd. and Casa Infini Realty Management Co. Ltd. The regulator also revoked the corporate registration of Bagong Bansang Maharlika (BBM) International Inc. for operating as a non-government organization without the necessary licenses.
In a resolution dated October 31, the SEC has affirmed the issuance of the CDO against Casa Infini, effectively denying the company’s motion to lift the order.
The SEC issued the order against Casa Infini on June 8, after the Enforcement and Investor Protection Department found the company and its officers to have been selling securities, in the form of investment contracts, without the proper secondary license from the SEC.
Casa Infini enticed the public to invest in their alleged real estate projects in Baguio City either as a buyer-investor or partner financier. Investors were promised a guaranteed income of more than P33,000 per month for 20 months, with the company assuring the public that the investments collected were supposedly financing the real estate properties that it owned, managed and operated.
In its motion to lift the CDO, Casa Infini argued that the solicitation from investors is not a scam since its project was supported by a license issued by the Department of Human Settlements and Urban Development.
In the financial world
THE group also denied being a Ponzi scheme, noting that the referral fee is paid and incurred not by the investments of new partners but by CI Builders itself because of the acknowledged benefit that the program will have for the business.
Casa Infini claimed that no damages were being reported by any of the company’s partners which, supposedly showcasing that the partner financiers did indeed receive the expected returns, proving the authenticity of the promised profits.
The SEC, however, dismissed the arguments of Casa Infini, maintaining that the group was offering securities in the form of investment contracts to the public without the necessary license.
“Consistent with the broad definition of securities, the term investment contract should include and cover all forms and varieties thereof which are known or considered, or ought to be known or considered to be such, in the financial world,” the SEC said.
“Under the foregoing legal precepts and parameters, an investment contract is considered to exist once it is determined/shown that the proponent is offering to the purchasers an opportunity to contribute money and to share in the profits of the operations,” the SEC said.
“Wherefore, premises considered, the ‘Verified Motion to Lift’ [the cease and desist order] filed by [Casa Infini] is hereby denied for lack of merit. The cease and desist order dated 8 June 2023 is hereby made permanent.”
Ultra vires acts
IN the case of BBM International, in an order dated November 14, the SEC has found that the group has been collecting membership fees from residents of various local communities, promising to provide food security, free education, free hospitalization, cash assistance and livelihood to all Filipinos aged one year and above worldwide.
While BBM International is a registered corporation with the SEC, activities such as coordinating welfare programs and collecting investments require secondary licenses from the appropriate government agencies.
BBM International is only allowed to exercise powers inherent to its existence, the SEC said.
Activities conducted by BBM International show that it should register and secure a license from the Department of Social Welfare and Development under the department’s relevant guidelines, according to the EIPD.
“These activities were clearly ultra vires acts or acts beyond the corporation’s authority. Evidently, [BBM International]’s SEC registration was obtained only for the purpose of giving a semblance of legitimacy to the corporation and that the corporation’s activities were sanctioned by the government,” the order said.
Further, BBM International has been found to be using President Ferdinand R. Marcos Jr.’s image as part of its marketing materials, creating a false impression that its programs are legitimate and sanctioned by the current administration.
“Worse, the use of the President’s picture in the identification cards, tarpaulins and other materials and paraphernalia of [BBM International] was done with palpable intent to mislead and deceive the public that the activities undertaken by the corporation are legitimate and are sanctioned by or with the imprimatur of the President or the Marcos administration,” according to the order.