By Jennifer P. Rendon
The Securities and Exchange Commission (SEC) on Wednesday (Dec. 13) advised the public not to deal with an Iloilo-based salon that has allegedly represented itself as an investment entity.
“This is to inform the public that Salon de Alexis is not authorized to solicit investments from the public,” the SEC advisory said.
The SEC advisory described the scheme used by the salon as akin to that of a Ponzi Scheme.
Named after Italian businessman Charles Ponzi, this scheme is a form of fraud that lures investors and pays profit to earlier investors with funds from more recent investors (taking money from Paul to pay Peter).
Daily Guardian has reached out to the salon on Wednesday evening for its comment and is awaiting its reply.
Based on the information gathered by SEC, the salon is owned and operated by a certain Ronald Pamplona Menor.
Salon de Alexis has currently branches – one at E. Lopez St., Jaro, Iloilo City, and another at M.H. Del Pilar St., Molo, Iloilo City.
SEC issued the advisor following motu proprio (on its own) investigation that individuals or a group of persons representing Salon de Alexis are enticing the public to invest their money in the said entity by soliciting investments through their Facebook Page:
“Notably, the investment scheme of Salon de Alexis involves the offering and sale of securities in the form of investment contracts as defined under Section 3.1 of the Securities Regulation Code,” the SEC advisory added.
The commission stressed that an investment contract, which is a kind of security, exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others which is prominent in the scheme of Salon de Alexis.
“As such, the Securities Regulation Code (SRC)requires that said offer and/or sale of securities must be duly registered with the Commission and that the concerned entity and/or its agents should have the appropriate registration and/or license to sell such securities to the public,” it added.
Further, the Financial Products and Services Consumer Protection Act (FCPA) also prohibits investment fraud which is defined under the law as any form of deceptive solicitation of investments from the public which includes Ponzi schemes and other schemes involving the promise or offer of returns sourced from the investments or contributions made by the investors themselves and the offering or selling of investment schemes to the public without a license or permit from the SEC.
Thus, the investment scheme of Salon de Alexis has the characteristics of a “Ponzi Scheme”, where it promises exorbitant rates of return with little to no risk at all to the investors, the SEC said.
The Commission stressed that it will not issue a License to offer or Sell Securities to the public, or to persons or entities engaged in such business or scheme.
Further, the SEC said that Salon de Alexis is not registered with the Commission either as a Corporation or Partnership and is likewise not authorized to solicit investments from the public since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the SRC.
With the caution not to invest in Salon de Alexis, the SEC has also “warned those who act as salesmen, brokers, dealers, agents, representatives, promoters, operators, recruiters, uplines, influencers, endorsers, abettors and enablers of Salon de Alexis in soliciting, selling, or convincing people to invest in the scheme offered by said entity, including solicitations and recruitment, may be held criminally liable under Section 28 of the SRC and Section 11 of the FCPA and for the two offenses, both penalized with separate maximum fine of P5 million or a penalty of twenty-one (21) years of imprisonment or both, pursuant to Section 73 of the SRC.”
