THE Securities and Exchange Commission (SEC) has issued a cease and desist order against BG Wealth Sharing Ltd. and its alleged representative Stephen Beard for the unauthorized offering and sale of investment contracts.
In a seven-page order dated May 20, the SEC’s Enforcement and Investor Protection Department said the firm was soliciting investments from the public, particularly overseas Filipino workers, through a cryptocurrency copy trading scheme using the DSJ Exchange platform.
The regulator said BG Wealth Sharing promised investors daily returns of 1.3 percent, compounded, for a minimum investment of $500 or around P30,000.
The SEC noted that it had issued an advisory on Jan. 28 warning the public not to invest or stop investing in the scheme, but the company allegedly continued promoting its investment offers on Facebook.
BG Wealth Sharing Ltd. is not registered as a corporation or partnership in the Philippines and has not secured a license to sell securities or register its investment products with the SEC.
The regulator said the investment scheme met the elements of an “investment contract," citing the pooling of investor funds, the promise of guaranteed profits and reliance on the efforts of others to generate returns.
It added that the continued offer and sale of unregistered securities violated Sections 8, 26 and 28 of the Securities Regulation Code.
The SEC also described the scheme as a form of financial fraud under the Financial Products and Services Consumer Protection Act, saying it involved deceptive investment solicitation similar to Ponzi schemes.
BG Wealth Sharing, Beard and all individuals acting on their behalf were directed to immediately stop selling or offering investment contracts and cease all online activities related to the scheme.
The commission also prohibited the respondents from transferring or disposing of assets and funds without SEC authorization to preserve assets for the benefit of investors.