SEC Gets 8th Conviction vs Illegal Lending Firm

• The Securities and Exchange Commission (SEC) secures its 8th conviction in its ongoing crackdown against illegal lending, with the directors of X-CEE789 Lending and Trading, Inc. found guilty of submitting falsified documents for company registration.
• The convicted individuals, found guilty beyond reasonable doubt of violating the Lending Company Regulation Act of 2007 (LCRA), are sentenced to pay a fine of ₱10,000 each.
• As part of its crackdown, the SEC has revoked the primary registration of 2,081 lending companies and cancelled the licenses of 35 financing/lending companies for non-compliance with the LCRA and other regulations.

The Securities and Exchange Commission (SEC) has made significant strides in its crackdown on illegal lending, securing another legal victory with the conviction of the incorporators and directors of X-CEE789 Lending and Trading, Inc. The company was found guilty of submitting falsified documents for its registration as a lending company.

Court Decision and Penalties

In a decision dated June 30, the Pasay City Regional Trial Court Branch 118 convicted Merlinda A. Derequito, Mila R. Anonuevo, Haydee S. Alarcon, Maria Collen A. Custodio, Marisa D. Abaquin, Ramona C. Belen, Pinder Kaur Bhopal, Parvesh Kumar, Karan Kumar, Surinder Bhopal, Kamaljit Kaur, and Jaswinder Kaur. They were found guilty beyond reasonable doubt of violating Section 12(3)(a) of Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA). Each of the respondents was sentenced to pay a fine of ₱10,000, with costs.

Falsified Documents and Misrepresentation

The SEC filed the criminal complaint after discovering that the respondents made a false statement in their application for the incorporation of X-CEE789 and issuance of its authority to operate. The company submitted a Certificate of Bank Deposit in the amount of P1 million, purportedly issued by Banco de Oro-Two Shopping Center Branch in Pasay City, to comply with the minimum paid-up capital prescribed by the LCRA.

However, upon verification with the bank, the SEC found that no such certificate was issued to X-CEE789, leading to the denial of the company’s application for registration.

Admissions and Violations

Luis Lopez, the former liaison officer of X-CEE786, revealed that he was instructed to secure a Certificate of Bank Deposit from a certain Sarah Jane Ibasco for the company’s application. Surinder Bhopal, Haydee Alarcon, and Karan Kumar admitted to signing the Articles of Incorporation of X-CEE789, stating that the company had a paid-up capital of P1 million.

They confessed that they planned to pay their capital contribution only after the company was registered with the SEC, a clear violation of the law.

SEC’s Crackdown on Illegal Lenders

The conviction of the incorporators and directors of X-CEE789 marks the eighth conviction the SEC has won since initiating its crackdown in 2017 on illegal lenders, including those engaged in “5-6” schemes and other usurious practices. In the eight cases decided so far, the concerned trial courts found 71 individuals, 33 of whom are foreigners, guilty beyond reasonable doubt of violating the LCRA.

Revocation and Cancellation of Licenses

The SEC, through the Corporate Governance and Finance Department (CGFD), has revoked the primary registration of a total of 2,081 lending companies to date for non-compliance with the LCRA. Additionally, the SEC has cancelled the licenses of 35 financing/lending companies due to various violations of applicable rules and regulations. A total of 58 online lending applications have also been ordered to cease operations for lack of authority to operate as a lending or financing company.

This article is published on BitPinas: SEC Gets 8th Conviction vs Illegal Lending Firm

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