The Securities and Exchange Commission (SEC) has made permanent its cease and desist order against Wellcons Unlimited Systems Inc. which was found to be offering investment packages in the guise of medical products without the necessary license.
Under a so-called binary system, Wellcons offered investment packages worth P2,500 to P13,890 with guaranteed returns of P9,000 to P32,000 per day.
Investors could further earn from Wellcon’s Pangkabuhayan Program, where they could supposedly double their money within six months by availing of investment packages worth P1,500 to P5,000. In addition, Wellcons promised leadership bonuses and referral fees, among others.
Wellcons’ investment scheme involved securities, particularly an investment contract, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.
Section 8 of 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.
While Wellcons was a duly registered corporation with the SEC, it had never secured a secondary license from the Commission to operate as a broker/dealer of securities, nor is it a registered issuer of any securities.
In its motion to lift the CDO, Wellcons argued, among others, that its business consisted mainly in the sale of health products, which were distributed to the consuming public through the various packages, with different subscription amounts.
“The complaints which the EIPD submitted in evidence show that member-investors actually purchased investment packages with the guaranteed returns, rewards, and monthly earnings as their main consideration for parting with their hard-earned money,” the Commission en banc said.
According to the SEC, there was nothing in the sales invoice that would show that the payor purchased Wellcons products, and that the sales invoice rather confirmed the sale or offer of investment packages by Wellcons, as stated in the foregoing marketing/advertising material which is published/posted online.
The SEC issued an advisory against Wellcons as early as February 2, in order to warn the public against investing in the group and similar entities.