The Securities and Exchange Commission (SEC) has warned the public against investing in schemes being offered by some gasoline companies as these may be fraudulent.
In its advisory, the SEC’s Enforcement and Investor Protection department said it received reports that these small gasoline companies are advertising that investors can co-own a gas station for a minimum amount of P300,000.
These companies usually offer subscription to the shares of stock of the company, franchise agreement, co-franchisee agreement, partnership agreement, co-ownership contract and other forms of contract that offers to the public an opportunity to invest in their company and earn profit “hassle free.”
The agency did not yet name the gasoline companies offering such investment schemes.
“In the said offers, the construction, management and operation of the gas stations will be the responsibility of the company. The investors just have to place their money, sign the contract, then wait for the quarterly distribution of profits,” the agency said.
“Some would even offer a guaranteed profit by claiming that the loss will be shouldered by the company.”
The SEC said it has a list of firms that are allowed to offer and sell securities. “Investments not included in the list are deemed to be unregistered and therefore not authorized to be offered to the public.”
The Capital Market Participants Registry System, meanwhile, also has its own list of capital market institutions and individuals authorized to solicit investments, such as broker dealers in securities and salesmen.
The SEC said individuals or firms who sell or solicit unlicensed investment products may be prosecuted. Under the Securities Regulation Code, the SEC may penalize individuals and firms selling unregistered securities with a maximum fine of P5 million or 21 years of imprisonment.
“Also, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public may incur criminal liability, or otherwise be sanctioned or penalized accordingly,” it said.
“The public is hereby advised to exercise caution in dealing with these gasoline companies or persons purporting to be their representatives.”