SEC warns public against Rise E-Commerce Systems

By Zinnia B. Dela Peña (The Philippine Star) Updated December 23, 2009 12:00 AM

MANILA, Philippines - The Securities and Exchange Commission has warned the public against dealing with Rise E-Commerce Systems Inc. and its affiliates which were found to have been selling securities to the public without prior approval of the corporate regulator.

In an advisory issued, the SEC said it has received complaints that Rise E-Commerce and its affiliates are soliciting investments from the public in the form of investment contracts which fall under securities.

Sec. 8 of the Securities Regulation Code prohibits the sale of securities without prior registration with the commission.

“Per verification, the said company is no longer operating at the address indicated in its articles of incorporation. The public is advised that the company is not licensed to solicit investments from the public in accordance with Sec. 8.1 of the Securities Regulation Code. The public should take the necessary precautions before entering into transactions

with the company,” the SEC said.

Another company that came under fire from the SEC is Goodlife Fashion

& Accessories Enterprise Corp. which has been promising a double-your-money scheme to attract more buyers.

The scheme purportedly offers investments in the form of distributorship agreements to the public, enticing prospective investors to earn profits ranging from 15 percent to 30 percent interest per month. 

This kind of solicitation activity is similar to a Ponzi scheme where investors are lured with promises of high returns and, for awhile, they may get those returns.

But what they don’t know is that their money is not really being invested in anything at all. The “interest” they receive is money being paid in by later investors.

As long as more investors sign on, which they will because of word-of-mouth advertising about the “great returns,” everything seems fine. But since no real investments are being made, it can’t last long. Because the promoter is only collecting money from new participants to pay off earlier investors, the scheme will inevitably fail.

After a time, the con artists pocket the investors’ money and disappear.