The Securities and Exchange Commission (SEC) has filed a criminal complaint against New Seataoo Corporation and Seataoo Information Technology OPC (Seataoo OPC), as well as its officers, for soliciting investments from the public without a necessary license.
In a complaint filed before the Department of Justice Jan. 16, the SEC charged New Seataoo, Seataoo OPC, and its officers and agents for violating Section 8.1 of Republic Act 8799, or the Securities Regulation Code (SRC), in relation to Rules 3.1.17 of its 2015 Implementing Rules and Regulations, sections 26.3 and 28 of the SRC, in relation to Section 6 of RA 10175, or the Cybercrime Prevention Act of 2012, and Section 11 in relation to Section 3(f) of RA 11765, or the Financial Products and Services Consumer Protection Act (FCPA).
The SRC prohibits the selling or offering of securities to the public without the requisite registration statement duly filed with and approved by the SEC. It also requires the issuer to secure a permit to sell securities, and its agents to be registered with the Commission.
The Cybercrime Prevention Act raises by one degree higher the penalty imposed for a crime committed through information and communication technologies, the SEC said in a statement recently.
Complaints were filed with the Commission by those who were supposedly enticed to invest in the Seataoo Group, based on advertisements found on social media platforms, such as Facebook and Youtube. These investors claimed that they invested amounts ranging from P20,000 to P2.3 million, due to an expectation of returns from the group.
Upon investigation, the Seataoo Group was found to be offering securities in the form of investment contracts through its “dropshipping e-commerce platform” scheme.
Under the scheme, the Seataoo Group entices potential investors to become an online seller on its platform with the requirement that they deposit money in order to process orders.
The investors are promised with profit ranging from seven to 12 percent of the amount they invested. It also offers an affiliate program where existing investors or online sellers get a three percent referral commission.
“This scheme affirms that the deposited funds are in reality, investments, since they are not limited to transactional payments directly tied to specific purchases. In fact, complainants demand for the return of their investments plus profits,” the complaint read.
“This mandatory funding of individual accounts required of Seataoo’s members/online sellers is a device used by Seataoo to mask its offer/sale of unregistered securities, and obtain investments from the public without having to secure the requisite license from the Commission,” it added.
The Seataoo Group’s public offering and selling of investment contracts without license likewise constituted fraud or deceit upon any person, which is prohibited under the SRC, the SEC said.
On June 10, 2024, the SEC issued an order of revocation against the New Seataoo Corporation and Seataoo Information Technology OPC, revoking their certificates of registration for violations of provisions of RA 11232, or the Revised Corporation Code of the Philippines, SRC, and FCPA.
On Dec. 26, 2024, the Commission en banc also denied the memorandum of appeal of New Seataoo Corporation and Seataoo Information Technology for lack of merit. ||
