SEC: Electronic World Trade Platform’s Investment Scheme a Ponzi

• The Securities and Exchange Commission (SEC) has flagged the Electronic World Trade Platform (EWTP) for illegally soliciting investments from the public.
• The SEC has determined that the EWTP is operating without the necessary license or authority to solicit investments, and that its investment scheme shows signs of a Ponzi scheme, in which the investment money of new investors is used to pay the fake profits of old investors.
• The SEC has warned that individuals involved in the EWTP scheme, including those who sell or convince others to invest in it, may be held criminally liable and face a maximum fine of PHP 5 million or imprisonment of 21 years, or both.

Another entity that entices the public to invest with it has been flagged down by the Securities and Exchange Commission (SEC).

Electronic World Trade Platform (EWTP), a mobile application that can be downloaded in the Google Play Store, has been flagged by the SEC for illegal solicitation of investments from the public. 

“Based on the mobile application, ELECTRONIC WORLD TRADE PLATFORM-EWTP claims to be a ‘platform to help you solve professional problems.’ EWPT further claims that it is a communication community dedicated to the knowledge of Internet IT technology.  It can quickly solve various problems encountered in technology for free in the form of Q&A.  It is a global electronic trade platform, which is initiated by the private sector and participated by various stakeholders,” the SEC explained as a result of its investigation, adding that EWTP claims to help developing countries, Small and Medium Enterprises (SMEs), and young people around the world easily enter the global market and participate in the global economy.

According to the Commission, the scheme of EWTP contains investment contracts, like: 

• BIOMEDICINE Package – an investor can choose any of the 14 types of medical supplies with a price of ₱300.00 to ₱60,000.00 valid for three days cycle up to 200 days cycle and a profit of ₱420.00 up to ₱720,000.00.
• VIP ACTIVITIES Package – an investor can choose any of the six types of VIP levels with a price of ₱1,000.00 to ₱20,000.00 valid for one day cycle up to 120 days cycle and a profit of ₱3,000.00 up to ₱500,000.00.
• A commission rate of 15% for the first level and 2% for the second level from Biomedical regional products
• The profit rate of 15% for first-level members and 1% for the second level members for the VIP activities

Selling securities in the form of an investment contract requires registration under the Securities Regulation Code (SRC). Entities and individuals planning to sell securities must also have a license to do so. 

However, the country’s regulatory agency has found out that EWTP does not have the appropriate registration:

“Based on the Commission’s database, ELECTRONIC WORLD TRADE PLATFORM-EWTP, is NOT REGISTERED as a corporation or partnership and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITY to solicit, accept or take investments/placements from the public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC).”

Also, the SEC concluded that the EWTP’s scheme also shows a potential “Ponzi Scheme,” where the investment money of the new investors is being used to pay the fake profits of the old investors. 

“The offering and selling of securities in the form of investment contracts using the ‘Ponzi Scheme’ which is fraudulent and unsustainable, is NOT a registrable security.  The Commission will not issue a License to Sell Securities to the Public to persons or entities that are engaged in this business or scheme,” the regulatory agency clarified. 

With this, the SEC warned that all individuals who act as salesmen, brokers, dealers or agents,   representatives, promoters, uplines, recruiters, influencers, endorsers, and enablers involved in EWTP in selling or convincing people to invest in the investment scheme, including soliciting investments or recruiting investors through the internet, may be held criminally liable under Section 28 of the SRC and penalized with a maximum fine of ₱5 million or imprisonment of 21 years or both.

The regulatory agency also highlighted that all the individuals involved in the scheme of EWTP will be reported to the Bureau of Internal Revenue (BIR) so that appropriate penalties and taxes will be assessed.

Lastly, the Commission is advising the public not to invest or stop investing with the EWTP because the unregistered security that it is selling shows signs of a Ponzi scheme: 

“In view thereof, the public is hereby advised NOT TO INVEST or to STOP INVESTING in the  investment scheme being offered by ELECTRONIC  WORLD  TRADE PLATFORM-EWTP, and its representatives.”

For more articles about SEC advisories, click here. 

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