Home Economy Cease-and-desist order vs Casa Infini permanent — SEC

Cease-and-desist order vs Casa Infini permanent — SEC


THE Securities and Exchange Commission (SEC) has made permanent the cease-and-desist order against the Casa Infini group, it said on Wednesday.

In a statement, the SEC said the order against Casa Infini Builders and Realty Co. Ltd., Casa Infini Realty Management Co. Ltd., and its affiliated entities was affirmed by the commission en banc in a resolution dated Oct. 31.

The order was issued on June 8 after the Casa Infini group was discovered to have been actively selling securities in the form of investment contracts without the necessary secondary license. 

According to the SEC, Casa Infini urged the public to invest in alleged real estate projects in Baguio City either as a buyer-investor or partner financier. Investors were promised more than P33,000 monthly income for 20 months with the assurance that the investments collected were to be used to finance real estate properties that the entity owned, managed, or operated.

Before the permanent declaration, Casa Infini filed a motion to lift the cease-and-desist order, arguing that the solicitation from investors was not a scam since its project was supported by a license issued by the Department of Human Settlements and Urban Development. 

Casa Infini denied practicing a Ponzi scheme, saying that the referral fee is paid and incurred not by the investments of new partners but by Casa Infini Builders itself because of the acknowledged benefit that the program will have for the business.

The entity also said that no damages were being reported by any of the company’s partners, which supposedly showcased that the partner financiers did indeed receive the expected returns, proving the authenticity of the promised profits.

However, the SEC’s commission en banc 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.

Under Section 8 of Republic Act No. 8799 or the Securities Regulation Code, the sale or offer to sell and/or distribute securities is prohibited without the proper secondary license from the SEC.

“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 commission en banc 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,” it said, adding that the June 8 order is permanent.

In a separate statement on Wednesday, the SEC said that it revoked the corporate registration of Bagong Bansang Maharlika (BBM) International Inc., which is said to operate as a non-government organization (NGO) without the necessary licenses as well as “using the president’s name to lure members.” 

Based on an order dated Nov. 14, the SEC’s enforcement and investor protection department found that BBM International violated Section 44 of Republic Act No. 11232 or the Revised Corporation Code (RCC), which mandates that no corporation possess or exercise corporate powers other than those conferred by the RCC or by its articles of incorporation.

According to the SEC, the entity was found to have 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 duly registered corporation with the SEC, activities such as coordinating welfare programs and collecting investments require secondary licenses from the appropriate government agencies,” the SEC 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,” it added. — Revin Mikhael D. Ochave


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