The Davao Extension Office – Securities and Exchange Commission (SEC-DEO) has advised the public not to invest or stop investing in Crowd1 Asia Pacific Inc. (Crowd1) for it is not authorized to solicit investments.
Lawyer Katrina Jamilla Ponco-Estares, SEC – Davao Extension Office head, said based on a SEC advisory, CROWD1 ASIA PACIFIC INC. (CROWD1) does not have a secondary license to solicit investments in the country.
The SEC has come out with an advisory on the entity following an extensive investigation into its schemes in soliciting investments from the public.
Based on its April 28 advisory, SEC said Crowd1 was a registered company, but is not authorized “to issue, sell or offer for sale securities to the public nor to undertake business activities” for doing so would require a secondary license.
Ponco-Estares said that her office received information that, aside from allegedly using foreign nationals in its recruitment of investors, the entity has also penetrated even the small towns and rural areas in Mindanao and other parts of the country.
“The danger is that Crowd1 can easily portray itself as legitimate business as it rides on modern technology and its so-called foreign experts, making it appear that it is not just legitimate, but that its scheme is truly profitable,” said Ponco-Estares.
Crowd1 is combining all these available technologies and are also tapping into the emerging industry: creation of mobile applications for profit like electronic gaming.
“It is easy to believe that by investing in Crowd1, one will profit as much as what is promised because its business model attracts the interest of different socioeconomic and age groups,” said Ponco-Estares.
CROWD1 does not have registered securities such as investment contracts nor have secured a secondary license to solicit and take investments from the public, as required under Republic Act No. 8799, or The Securities Regulation Code. While incorporated, CROWD1 must have secured a secondary license before it could engage in investment-solicitation activities.
In this light, the Commission advised the public to exercise caution in dealing with any individual or group soliciting investments for and on behalf of CROWD1.
Under its scheme, CROWD1 offers membership packages worth P6,000 to P240,000. An investor is entitled to bonuses by simply joining, sponsoring newer members and recruiting more people.
It promises residual incomes or bonuses supposedly from its digital gaming business. Upon joining, a member acquires a so-called owner right, which would entitle him/her to a share in the company’s total revenues from affiliate income.
The SEC, however, noted that CROWD 1 earns mainly from the recruitment of members, as in a pyramiding scheme, with most of the games touted by the group unavailable in the Philippines.
“We are reminding the public that those who act as salesmen, brokers, dealers or agents of fraudulent investment schemes may be held criminally liable and penalized with a maximum fine of P5 million or imprisonment of 21 years or both under the Securities Regulation Code,” Ponco-Estares added.
Those who invite or recruit others to join or invest in such ventures may likewise incur criminal liability, or otherwise be sanctioned or penalized accordingly.
Republic Act No. 11469, or the Bayanihan to Heal as One Act, further penalizes those participating in cyber incidents that make use or take advantage of the COVID-19 pandemic to prey on the public through scams, phishing, fraudulent emails, or other similar acts with two-month imprisonment or a maximum fine of P1 million or both.
Reports of unauthorized investment solicitation activities may be emailed to the SEC Enforcement and Investor Protection Department at firstname.lastname@example.org.
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