The Securities and Exchange Commission (SEC) has filed a criminal complaint against Eton Phil Non-Specialized Wholesale Trading for its alleged unauthorized investment solicitation activities.
The SEC identified the top company officials and agents of Eton Trading as respondents in the criminal complaint filed with the Department of Justice.
The SEC said it found Eton Trading to have solicited investments from the public without the proper license from the SEC. This is in violation of Sections 8, 26 and 28 of the Securities Regulation Code (SRC) and Section 11 of the Financial Products and Services Consumer Protection Act, in relation to Section 6 of the Cybercrime Prevention Act of 2012.
The SRC prohibits the sale or distribution of securities without a registration duly filed and approved by the Commission. Persons found guilty of the provisions of the SRC shall suffer a fine of up to P5 million, or imprisonment of up to 21 years, or both.
The FCPA also prohibits investment fraud defined under the law as any form of deceptive solicitation of investments from the public which includes Ponzi Schemes and such other schemes involving the promise or offer of profits or returns sourced from the investments or contribution made by investors themselves and the offering or selling of investment schemes to the public without a license or permit from the SEC.
Violators of the FCPA face separate penalties of a fine of up to P5 million or imprisonment of up to 21 years, or both.
The case stemmed from various inquiries that the Commission received starting from September 2022 about the legality of Eton Trading investment solicitation activities.
Investigation by the SEC Enforcement and Investor Protection Department uncovered various photos, videos, and posts enticing the public to invest in Eton Trading, all published on the company’s Facebook account and group.
Eton Trading offered a 20 percent to 50 percent profit monthly with a minimum capital investment of P5,000 and a maximum of P100,000. Earnings would allegedly come from the sale of wholesale products.
Section 8 and 28 of the SRC provides that securities shall not be sold or offered for sale without a registration statement duly filed and approved by the Commission, and expressly prohibits the sale of such securities by a company or broker without the proper registration and licenses issued by the SEC.
Meanwhile, Section 26 makes it unlawful for any person to employ any device, scheme, or artifice to defraud the public in connection with the same of securities.
“There is sufficient proof that Eton Trading and [its officers] employed fraud and deceit upon the investing public to induce them to invest in this scheme,” the complaint read.
It added that, “Lured by the false promise of quick financial gains on their investments, unsuspecting people readily turned over their hard-earned money to the coffers of Eton Trading.”
Eton Trading is not registered with the Commission as a corporation. Neither did it have a pending application for the necessary licenses to sell investments.
The SEC posted an advisory warning the public against investing in Eton Trading on Feb. 23. A cease and desist order was then issued against the company on June 15, directing it to stop soliciting investments from the public.