SEC-CDO orders Bukidnon-based firm to stop investment sales
CAGAYAN DE ORO CITY (PIA)--The Securities and Exchange Commission in an order dated 23 June 2022, has issued a cease and desist order (CDO) against Wellcons Unlimited Systems Inc. “WELLCONS” to immediately cease and desist from engaging in the unlawful/unauthorized solicitation, offer and/or sale of securities in the form of investment contracts and/or any similar or related acts, until the requisite registration statement is duly filed with and approved by the Commission. Following the date of the issuance, the CDO was immediately served by the SEC Cagayan de Oro Extension Office at the principal office address of WELLCONS in P15A National Highway, Bagontaas, Valencia City, Bukidnon.
In the said CDO, WELLCONS’ President, Mr. Merarie E. Pailagao, its officers, operators, administrators, promoters, representatives, salesmen, agents, investment team planners, mentors, enablers, influencers, assigns, conduit entities, subsidiaries (collectively referred to as Agents) is directed to immediately cease and desist from further engaging in the sale and/or offer of unregistered securities, and to cease its internet presence relating to its investment activities until the requisite registration are filed with and approved by the Commission.
Further, the SEC likewise directed the company from transacting any business involving funds in its depository banks and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets for the benefit of affected investors.
In the instant case, the evidence on record shows that WELLCONS is offering unregistered securities in the form of investment contracts to the investing public through its website and social media platforms, i.e., Facebook and YouTube, without the requisite license.
The EIPD confirmed it with the other concerning departments of the SEC that WELLCONS, although a registered corporation is NOT allowed to solicit investments from the public. It is to be recalled in all the SEC Issuances and Advisories that a Secondary License is needed before a corporation may solicit investments from the public, which in this case, WELLCONS only holds the primary registration license.
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.
WELLCONS offers/sells unregistered securities either a Binary System or the Pangkabuhayan program, the former being a gateway to a member’s entitlement and enjoyment of the profits/benefits given in the latter.
During the course of its investigation, the EIPD and the SEC – CDOEO has been receiving numerous complaints from its member-investors for having delays in receiving their guaranteed profits, worse, unpaid at all. Complainants state as well that their demands for their original investments were completely ignored by WELLCONS.
“We have been very vigilant on their operations in Bukidnon and in some parts of Misamis Oriental and Agusan del Norte. Our investigators went to these areas to verify the existence and the operations of WELLCONS. It is indeed, very rampant with their (WELLCONS) growing number of members, hence, this enforcement is addressed” says Lawyer Frederick A. Enopia, Director of SEC – CDOEO. (SEC-CDOEO/PIA-10)