NextGen Day

MANILA, Philippines — RGS World Marketing Corp., situated in Negros Occidental, has been ordered by the Securities and Exchange Commission (SEC) to discontinue its illegal investment scheme targeting Western Visayas investors.

The Commission en banc ordered RGS World to cease and desist from engaging in the unlawful or unauthorized solicitation, offer, and/or sale of securities until it has filed the required registration statement and received the appropriate approval from the SEC in an order dated March 1.

RGS World, its directors Rodolfo Garcia Salarda Jr., Leah Pasis Salarda, Rodelyn Balico Salarda, Henje Noble Cuadra, and Ryan Ladoing, as well as its executives, operators, representatives, salesmen, and agents, have been ordered to stop advertising their investment program on the internet.

To protect the preservation of the investors’ assets, the company and its directors have been barred from transacting any activity involving funds in its depository banks, as well as transferring, disposing, or conveying any associated assets.

After investigations by the SEC Enforcement and Investor Protection Department (EIPD), SEC Bacolod Extension Office (BacEO), and SEC Iloilo Extension Office revealed that RGS World was selling and/or offering compensation plans worth PHP1,000 to PHP20,000, with promised returns ranging from PHP3,500 to PHP80,000, the commission issued the cease and desist order.

Directors, agents, promoters, and existing investors of the Bacolod City-based company were found to be utilizing their Facebook pages to present images of investors who had reportedly received their rewards to draw potential investors into their scheme.

Non-monetary rewards, such as frozen items and rice, were also promised, as well as additional bonuses, incentives, and merchandise for referring or recruiting other members.

To disguise its investment scheme as a genuine distribution firm, the corporation also supplied soap, liniment oils, rice, eggs, and other poultry goods.

“The EIPD was able to prove that RGS WORLD’s investment scheme comprises the pooling of resources consisting of its investors’ money, which is then used to satisfy and pay the guaranteed returns of its existing investors,” the commission en banc said.

“This is the common operation that is perpetuated by public investments received by RGS World,” it stated, “but it is covered by a product distribution business that does not exist in reality.”

The commission also discovered that in order to receive their assured returns, investors must entrust their funds to RGS World’s directors, executives, agents, and promoters.

However, some investors have already complained to BacEO, stating that they have not gotten the promised earnings or products.

According to the SEC, the scheme entails selling and offering securities to the public in the form of investment contracts, in which a person invests his money in a shared venture and is led to expect gains solely from the efforts of others.

Section 8 of Republic Act No. 8799, or The Securities Regulation Code (SRC), states that securities may not be sold, offered for sale, or distributed inside the Philippines unless they have been registered with and approved by the Securities and Exchange Commission (SEC).

“(T)his commission finds, and so holds, that RGS World is unlawfully involved in the sale and/or offer of unregistered securities in the form of investment contracts,” according to the order.

RGS World is a corporation that has been officially registered with the commission. It has, however, never obtained a secondary license from the commission as a securities issuer or broker-dealer, nor has it ever registered any securities for public offering under the SRC.

According to the EIPD, records from the Food and Drug Administration demonstrate that RGS World and its connected businesses do not have a license to operate a distribution business.

“The panel holds that RGS World’s act of selling/offering unregistered securities constitutes a public deception that, if left unchecked, will certainly cause significant or irreparable loss or prejudice to the investing public,” the commission en banc concluded.

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