SEC permanently bars Casa Infini from soliciting investments

The Securities and Exchange Commission (SEC) has made permanent its cease and desist order (CDO) issued against Casa Infini Builders and Realty Co. Ltd., Casa Infini Realty Management Co. Ltd., and its affiliated entities.

This comes after the Commission En Banc denied the company’s motion to lift the CDO.

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The Commission En Banc issued the CDO against Casa Infini on June 8, after the SEC Enforcement and Investor Protection Department (EIPD) found the company and its officers to have been actively selling securities, in the form of investment contracts, without the proper secondary license from the SEC.

Casa Infini enticed the public to invest in their alleged real estate projects in Baguio City either as a buyer-investor or partner financier. 

Investors were promised a guaranteed income of more than P33,000 per month for 20 months, with the company assuring the public that the investments collected were supposedly financing the real estate properties that it owned, managed, and operated.

Section 8 of the Securities Regulation Code (SRC), expressly prohibits the sale or offer to sell and/or distribute of securities without the proper secondary license from the SEC.

In its motion to lift the CDO, Casa Infini argued that the solicitation from investors is not a scam since its project was supported by a license issued by the Department of Human Settlements and Urban Development.

The group also denied being a Ponzi scheme, noting that the referral fee is paid and incurred not by the investments of new partners but by CI Builders itself because of the acknowledged benefit that the program will have for the business.

Further, Casa Infini noted that no damages were being reported by any of the company’s partners which, supposedly showcasing that the partner financiers did indeed receive the expected returns, proving the authenticity of the promised profits.

The Commission En Banc dismissed the arguments of Casa Infini, maintaining that the group was offering securities in the form of investment contracts to the public without the necessary license.

Rule 26.3.5 of the Implementing Rules and Regulations of the SRC defines investment contracts as a transaction, contract, or scheme whereby a person invests his or another person’s money and/or property in a common enterprise and is led to expect profits primarily from the efforts of others.

“Consistent with the broad definition of securities, the term investment contract should include and cover all forms and varieties thereof which are known or considered, or ought to be known or considered to be such, in the financial world,” the Commission En Banc said.

The Commission En Banc concluded that the scheme perpetuated by Casa Infini is a bona fide investment contract, especially considering that the partner financiers expect a profit from their initial investments.