The Securities and Exchange Commission (SEC) has revoked the registration of Wellcons Unlimited Systems Inc. after it was found to be engaged in an investment scheme called “binary system.”
The SEC said the investment is a “double-your-money” scheme aimed at illegally soliciting investments from the public.
The SEC added Wellcons is publicly offering and selling securities without a secondary license.
Wellcons has been offering investment packages worth P2,500 to P13,890 under its binary system, with guaranteed returns of up to P9,000 to P32,000 per day.
Members who availed of the investment packages can further earn through Wellcon’s Pangkabuhayan Program, in which they can supposedly double their money within six months based on investment packages worth P1,500 to P5,000.
Wellcons promised leadership bonuses and referral fees, among others.
The SEC said Wellcons’ investment scheme involves securities, particularly an investment contract, where a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.
“As a form of security, investment contracts must be registered with the SEC,” it said.
While Wellcons registered with the SEC, it has never secured a secondary license to operate as a broker or dealer of securities, nor is it a registered issuer of any securities, the agency added.
The SEC also argued Wellcons’ double-your-money scheme through its Pangkabuhayan Program resembles a Ponzi scheme, in which the profits or payouts taken from incoming investors are paid to existing or earlier investors.
“In a nutshell, Wellcons’ scheme is encapsulated by the saying ‘robbing Peter to pay Paul’ — considering that it does not have any underlying legitimate business where it could source its promised return on investments to its investors,” the agency said. — Ruelle Castro
