SEC: DoJ indicts Cebu firm officers over investment fraud

THE Securities and Exchange Commission (SEC) said the Department of Justice (DoJ) has indicted two officers of Cebu-based Fergus, Inc. for illegally soliciting investments from the public.

In a statement on Tuesday, the SEC said the DoJ found sufficient evidence with reasonable certainty of conviction to charge the Fergus President and Corporate Secretary and Chief Finance Officer for violations of the Securities Regulation Code (SRC), the Cybercrime Prevention Act, and the Financial Products and Services Consumer Protection Act.

The case originated with an investigation by the National Bureau of Investigation (NBI) after Padlan Salvador & Associates filed a complaint on behalf of Australian clients who alleged fraud by the company. The NBI then asked the SEC to investigate, which found that Fergus was offering investment contracts through automated trading software without proper authorization.

As stated in the resolution, Fergus was selling securities without the required SEC registration and secondary license to operate as a broker or dealer.

The company marketed investment contracts through an automated trading software, claiming it could generate passive income for customers with a minimum investment of $250, despite having no proof of the software or related materials.

“While Fergus was a duly registered corporation with the SEC engaged in providing business process outsourcing services, particularly in generating sales and marketing support to clients abroad, its articles of incorporation specifically prohibited the company from accepting or taking investments/placements from the public and issuing investment contracts,” the corporate regulator said.

Under Sections 8 and 28 of the SRC, entities offering securities to the public must first secure registration and a secondary license from the SEC. Violations carry penalties of up to P5 million in fines and imprisonment of up to 21 years.

Section 26 of the same law prohibits anyone from using any scheme or trick to defraud, gain money or property through false or misleading statements, or omit important information that could deceive others.

Meanwhile, the Cybercrime Prevention Act increases penalties by one degree for crimes committed using information and communications technology. — Alexandria Grace C. Magno