- The SEC has secured 6 investment scam case convictions for six individuals involved in an investment fraud scheme led by GDM Finance SARL.
- These individuals, convicted for violating Sections 8 and 26 of the Securities Regulation Code (SRC), were each fined ₱100,000 and are subject to subsidiary imprisonment if the fine is not paid.
- The investigation into GDM revealed their involvement in investment activities and their promotion of guaranteed profits through placements.
The Securities and Exchange Commission (SEC) has successfully secured the convictions of six individuals linked to an investment fraud orchestrated by GDM Finance SARL. The Commission noted that this marks the 22nd conviction for violations of the country’s securities regulations.
Investment Scam Case Conviction After Almost 5 Years
According to the media release, the Pasig City Regional Trial Court Branch 158 convicted the six criminals—identified as Anita E. Armada, Milany P. Cabrera, Josephine D. Maranan, Nanette D. Tongco, Gerald L. Samson, and Jacinto Lucio P. De Catalina— for violating Sections 8 and 26 of Republic Act No. 8799, the Securities Regulation Code (SRC) during the April 17 joint ruling.
The convicts were each fined ₱100,000 and are liable to subsidiary imprisonment in case of non-payment.
The Commission disclosed that following an on-site field investigation, the Enforcement and Investor Protection Department (EIPD) confirmed that GDM was indeed involved in investment-taking activities. The investigation also revealed that GDM had a Facebook account where it advertised that it could pay dividends to shareholders and provide a steady return on investment.
“In this case, it is clear that the accused is soliciting investment from the attendees and promises that the same will earn guaranteed profits through the placements that will be made by GDM.”Pasig City Regional Trial Court Branch 158
The Commission further shared that the prosecution successfully demonstrated that the accused individuals did not disclose the fact that the securities were not registered, even though they knew that this information was material to potential investors who attended the orientation seminar.
“Thus, they are liable under Section 26.2 of the SRC for omitting a material fact that misleads the public into believing that the securities they offer are registered.”Pasig City Regional Trial Court Branch 158
The GDM Finance SARL Investment Scam Case
The case was initiated following a complaint received by the SEC in July 2018. The complaint contended that GDM had organized a seminar at a shopping mall, during which presenters urged participants to invest in GDM with the promise of a minimum 2.5% weekly return.
Subsequently, after four months, the EIPD worked with the Anti-Cybercrime Group of the Philippine National Police (PNP) and executed an entrapment operation that resulted in the apprehension of the individuals involved in November 2018.
Accordingly, the SEC filed charges against GDM based on Section 8 of the SRC, which forbids the sale or distribution of unregistered securities, and Section 26, which deems it unlawful to employ fraudulent methods to solicit public investments.
GDM had failed to register any securities with the SEC, as mandated by the SRC, and had also neglected to secure the required licenses for issuing various financial instruments such as mutual funds, exchange-traded funds, proprietary or nonproprietary shares, membership certificates, and timeshares.
SEC Anti-Scam Efforts
As of writing, the SEC disclosed that it has achieved convictions for 33 individuals in 22 cases, resulting in a collective imprisonment sentence of 712 years and fines amounting to P28.4 million.
Additionally, there are ongoing prosecutions against 355 individuals across 145 cases for SRC violations and two cases for violations of Republic Act No. 11765, also known as the Financial Products and Services Consumer Protection Act of 2022, as of September 2023. Furthermore, the SEC has filed criminal complaints against 31 corporations and 239 individuals with the Department of Justice as of June 30, all of which are awaiting resolution.
Furthermore, the Commission has been actively disseminating information and advisories against investment schemes to fight scammers in the country. Recently, the SEC issued a warning regarding illicit solicitations conducted through social media by White Dragon Investment Group and its leader, Justin Arvin Santos Atendido. The investment group asserts involvement in diverse sectors such as real estate, food, franchising, leisure, gaming, poultry, and private investments.
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