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SEC warns: Don’t invest with unregistered firms

By Danica D. Caballero

LEGAZPI CITY --- The office of the Securities and Exchange Commission, here, has warned the public against investing in unregistered investment companies or agents, saying investors in such companies or agents would not be able to recoup their investments.

Lawyer Norma Tan-Olaya, director of SEC’s Legazpi Extension Office, said Wednesday that to avoid falling prey to scams, one should only invest in a legitimate business or company registered with SEC that has secondary licenses.

“To know if the transaction is an investment contract you should use Howey Test and investment checklist as well,’’ she said.

Olaya discussed these during SEC’s roadshow dubbed as Balik Alindog for Financial Literacy: The Road to being a SEC-SEE (Scam-proof, Equipped, and Empowered) Investor in Legazpi City.

NUMBERS GAME Photo shows a sort of betting stub on which a combination of numbers (13-11) was written. Either jueteng or the PCSO’s small town lottery (STL), both are prohibited in Naga City. The operation of the numbers game began to thrive here several weeks after the May 2022 elections. -jordandomingo

The event, which was simultaneously held in all nine (9) extension offices of SEC, aimed at capacitating the public and private sector on financial literacy, financial management, investor education, and investment scams.

It is part of the SEC 86th founding anniversary and Investor Protection Week (IPW) celebration.

Do the Howey test

Olaya cited that investors should be keen in examining a company’s legality and be wary of unrealistic returns presented by some investment agents.

She added that SEC uses the Howey test to asses if the transaction is an investment contract and is within the jurisdiction of the commission.

According to the test, a transaction qualifies as an investment contract when it involves (1) an investment of money, (2) a common enterprise, (3) expects profit and (4) the return is derived from the efforts of others.

Olaya clarified that if a company, whether fraud or not, did not pass the four (4) elements of the Howey test, it is not within SEC’s authority.

Check legitimacy

Moreover, she reminded the public to use SEC’s investment checklist to know if investment offers are legitimate.

According to SEC a contract is legal when the company can present the following: (1) SEC certificate of incorporation, (2) articles of incorporation, (3) company bylaws, (4) order of registration containing investment contract, (5) certificate of permit to offer securities for sale, (6) certificate of registration of licensed investment broker or salesperson, and (7) registration statement or prospectus containing the nature of business and risk of investment.

For queries and reporting investment scams, Olaya said that their office can be reached through email via and and through phone numbers 09959442701 and 0929881917.

“With this roadshow, we hope that we are able to teach our stakeholders to be careful in investing and taught them how to identify legitimate versus fraudulent investment schemes,” Olaya said. (PIA5)


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