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Firm ordered to stop investment scheme

 

 

 

 

THE Securities and Exchange Commission (SEC) has ordered R.L. Aggregates and Diversified Lending Group, Inc. to stop soliciting investments from the public through a fraudulent scheme that involves the use of falsified registration documents.

In an order issued July 27, the SEC ordered R.L. Aggregates to immediately cease and desist from engaging in the unauthorized solicitation, offer and/or sale of securities in the form of investment contracts until the requisite registration statement is duly filed with and approved by the Commission.

The SEC further enjoined the company to cease its internet presence relating to the transactions and investment scheme covered by the order.

The company, along with its operators, directors, officers, representatives, salesmen, and agents, has likewise been prohibited from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying in any manner, any related assets to ensure the preservation of the assets of the investors.

The order extends to R.L. Aggregates’ directors, namely Roberto S. Llorente, Jennylyn M. Clemente, Patricio B. De Villa, Carlo S. Mamaril and Alvin C. Camanero, its operators, officers, representatives, salesmen, agents including Ashley Reyes, Maya Gonzalez, Randy Dela Cruz and Kenneth Daniel Papa, and any and all persons claiming, acting, and operating for and in their behalf.

The SEC issued the order after finding that R.L. Aggregates has been enticing the public to invest in the company in exchange for guaranteed returns of 1% per day or 30% per month over a lock-in period of three months.

The scheme requires potential investors to invest or deposit an amount ranging from P1,000 to P500,000, with dividends to be paid out every 15th and 30th of the month.

With this, an investor with a capital of P1,000 will supposedly earn P150 every 15 days, or a total of P1,900 after three months. Over the same period, those who invest P500,000 would receive a total of P950,000.

The scheme involves 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, according to the SEC.

Section 8 of Republic Act No. 8799, or The Securities Regulation Code (SRC), provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.

R.L. Aggregates is registered with the Commission and holds a Certificate of Authority to operate as a lending company. However, it has never secured a secondary license to solicit investments from the public, as required under Sections 8 and 12 of the SRC.

An investigation by the SEC Enforcement and Investor Protection Department (EIPD) revealed that R.L. Aggregates has been using an altered and falsified copy of its Articles of Incorporation (AoI), stating that “the corporation shall direct solicit, accept or take investments/placements from the public and shall issue investment contracts.”

The EIPD also found that R.L. Aggregates falsely declared that it is a mother company of cooperative and lending groups that caters to agriculture, small businesses and small-scale mining in Masbate.

The Commission noted: “In this case, R.L. Aggregates intentionally used or allowed the use of a falsified AoI to make it appear to the investing public that it was duly authorized by the Commission to solicit, offer, accept, sell and/or take investments from the public. Through the falsified AoI, R.L. Aggregates was able to conveniently offer and/or sell unauthorized securities from investors by means of fraud.”

Section 26 of the SRC prohibits fraudulent transactions relating to the purchase or sale of securities such as the employment of any device, scheme, or artifice to defraud and the engagement in any act, transaction, practice or course of business which operates or would operate as a fraud or deceit upon any person.

The Commission further noted that R.L. Aggregates’ authorized capitalization was only P1.5 million, which would make its business model “not sustainable and will likely cause grave or irreparable injury or prejudice to the investing public.”

“Moreover, the EIPD also pointed out that Respondent’s act of taking advantage of the pandemic to refuse any visit/transaction at its main office in Taytay, Rizal by its investors, and its insistence that investors only transact online, is questionable and suspect,” the order read.

The Commission warned the public against investing in R.L. Aggregates and other entities engaged in unauthorized investment-taking activities as early as February 23, 2021 through an advisory. Several complaints and inquiries from the public were subsequently received by the SEC, including 21 complaint-affidavits filed with the EIPD on March 26, 2021.

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