SEC flags WOW Company for Ponzi-like investment scheme

THE Securities and Exchange Commission (SEC) issued an order of revocation to Wealth on Web Company, or WOW Company, for its Ponzi-like investment scheme and for operating without a license or registration.

In an advisory dated April 29, the SEC said that WOW Company was registered in its database as a partnership. As such, it was not authorized to solicit investments from the public as it did not secure prior registration and license to do so.

“Neither is WOW Company licensed as a capital market professional such as, among others, a securities broker,” it added.

WOW Company allows certain persons acting as its agents or representatives to make public presentations of its investment scheme and to invite the public to invest through social media.

The SEC said these acts make the group “liable for the unauthorized public offering of securities and the misrepresentation committed in connection with such public offering.”

It said the investment scheme has the characteristics of a Ponzi scheme, or an investment program that offers impossibly high returns and pays these returns to early investors out of the capital contributed by later investors.

Based on records from the commission, the company’s business purpose is to engage in direct selling of goods and merchandises to consumers, to engage in business of retail trading, such as but not limited to: apparels, e-loads, e-pins, e-coins, beverages, health and wellness, cosmetics and digital products.

“The department received various e-mails inquiring or reporting about [WOW Company] and its alleged investment-taking activities promising a guaranteed return on investment,” the commission said.

According to the SEC’s investigation, the unauthorized firm entices the public to an investment package where one may put in a minimum amount of P150 to as high as P135,000, while promising a return of as much as 3% to 6% daily depending on the chosen plan.

“The foregoing investment scheme of WOW Company has the characteristics of an ‘investment contract,’ a form of securities which must first be registered with the commission… before they may be offered and sold or distributed to the public,” the regulator said.

In April, the SEC had issued a show-cause order against the firm. However, its investigation showed that despite receiving the order, the group continued offering its services.

The advisory stated that the commission will be revoking the registration of the company as a partnership, and that its partners are directed to pay a fine of P1 million within a period of 15 days from receipt of the order. — Luisa Maria Jacinta C. Jocson