The Court of Appeals (CA) has upheld the order of the Securities and Exchange Commission (SEC) to stop the electronic loading business of Planpromatrix Online Co. after the agency found that it solicited investments without securing the required licenses.
In a 17-page decision dated July 19, the CA Special 10th Division affirmed the cease and desist order (CDO) issued by the SEC against Planpromatrix for its fraudulent operations, which caused grave injury to the investing public.
The SEC ordered Planpromatrix to halt its operations on July 16, 2019.
The investment scheme involved the solicitation of P600 to P1,850 of investments from the public, from which they can supposedly earn through an e-loading business, data entry job and advertising package.
An investment of P600 can have a return of P100,000 just from e-loading business, from typing CAPTCHA (Completely Automated Public Turing test) composed of the digits and letters to distinguish humans from robots or from getting more members to join the system.
Planpromatrix, also known as PPM, filed a motion to lift the said order, but the SEC denied the motion and declared the order permanent in a resolution dated November 11, 2019.
The company then filed a petition for review before the CA, assailing the validity of the SEC’s order and the finding of the agency that its operations required a secondary license and registration statement, among others.
“[T]here is wisdom in the issuance and continuance of the CDO against petitioner,” the CA said.
The SEC found that the business activities of Planpromatrix “partake of the nature of an investment contract,” where there is placement of money in a common enterprise with an expectation of profits derived primarily through the effort of others.
The CA noted the implied admission made by Planpromatrix president and CEO George Naval, who did not dispute the contents of the advisory issued by the SEC on February 9, 2018 during a meeting with the SEC’s Enforcement and Investor Protection Department on February 13, 2018.
“There can be no debate on the authority of the SEC to issue the subject CDO, provided that the conditions therefor, i.e., that fraud has been perpetrated and grave injury is likely to be caused to the public, are extant,” the CA said.
An investigation conducted by together with the SEC Legazpi Extension Office, also revealed that the company did not have the required business permit.
“Those considerations and their supporting documents muster more than a mere scintilla of proof, and satisfy the required substantial evidence of fraud and grave injury committed against the investing public,” the CA said.