ILOILO City – The Securities and Exchange Commission (SEC) revoked the certificate of incorporation and registration of Chiyuto Creative Wealth Documentation Facilitation Services whose double-your-money roulette game made it attractive for people to invest in, particularly those in Roxas City and Capiz province.
SEC released the revocation order yesterday, two weeks after it issued on Feb. 1 a cease and desist order stopping the company from soliciting investments from the public.
Investors in Roxas City and Capiz are now wondering what will happen to their money.
In this latest SEC order, the company was slapped, too, with monetary penalty totaling P3 million for violation of the following Securities Regulation Code (SRC) provisions:
* Section 8.1 – for offering and selling to the public unregistered securities in the form of investment contracts through its Double-Your-Money Roulette Game Scheme
* Section 28.1 – for acting as a broker (Chiyuto/Chiyuto OPC) in securities and broker/salesman in securities (Patrocenio Chiyuto Jr.) without the corresponding license or registration when they solicited/offered investments to the public
* Section 26.1 – for employing fraud and engaging in a Ponzi scheme in connection with the offering and selling of securities in the form of investment contract through its Double-Your-Money Roulette Game Scheme
Patrocenio Chiyuto Jr. is the principal, proprietor and sole stockholder-director-president of the company. He could not be reached for comment yesterday; his whereabouts were unknown.
He recently issued a statement denying he was involved in an illegal activity. He also assured investors they would be getting their money back.
The SEC order yesterday was signed by Atty. Oliver Leandro, officer-in-charge of the Commission’s Enforcement and Investor Protection Department.
Just this Feb. 9, 10 investors in Capiz sought the help of the National Bureau of Investigation (NBI) Region 6.
Atty. Jeremiah Sargado, assistant regional director of NBI, confirmed that these people submitted sworn statements. Their combined investments reached some P50 million and they wanted their money back.
Charges they were mulling to file to could include estafa, large scale estafa and syndicated estafa.
The SEC made it clear in its order yesterday that the monetary penalties against the company were “without prejudice to the filing of criminal charges for violation of the Securities Regulation Code which is punishable by up to 21 years imprisonment…”
“The Commission further reserves the right to impose sanctions and file criminal charges against other persons and entities responsible for this scam as the pieces of evidence already gathered or prospectively collated warrant under the circumstances,” the order further read.
The SEC issued the cease and desist order on Feb. 1 after finding that the company offered investments to the public with promised returns of 100 percent in one day, 30 days or 45 days, depending on the outcome of the roulette, without securing a secondary license.
Under the scheme, an investor places as low as P1 to as much as P1 million. The company will then spin the roulette to select the payout schedule and issue a promissory note to the investor with the corresponding return and day when the guaranteed earnings could be claimed.
In addition, the company offered a five percent referral commission and held raffles with brand new cars and motorcycles as prizes to attract more investors.
The scheme involved the sale and offer of securities to the public in the form of investment contracts, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC.
Section 8 of Republic Act No. 8799, or The Securities Regulation Code, provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.
The company initially registered as a sole proprietorship with the Department of Trade and Industry and subsequently as an OPC with the SEC. However, it has never secured a secondary license from the Commission as issuer of securities or broker dealer nor registered any securities for public offering pursuant to the SRC.
SEC emphasized that the certificate of registration granted to Chiyuto explicitly prohibited it from soliciting, accepting, or taking investments or placements from the public, as well as issuing investment contracts, without securing a secondary license.
The Commission warned the public against investing in Chiyuto and other entities engaged in unauthorized investment-taking activities as early as Aug. 18, 2020 through an advisory, as well as through an investor alert posted on its official Facebook page on Oct. 23, 2020./PN
