The Securities and Exchange Commission (SEC) reported that it has secured the conviction of the incorporators of Prosperous Infinite Holdings Phils. Corp. (PIHPC) and operators of Emgoldex Philippines for soliciting investments from the public without necessary license from the commission.

In a decision dated Oct. 1, 2024, the Regional Trial Court of Pasig City found PIPHC incorporator and director John Rafael Calicdan and corporate secretary Ryan Manuit guilty beyond reasonable doubt of violating the Securities Regulation Code (SRC).

Manuit and Calicdan were sentenced to imprisonment of up to 10 years, and to pay a fine of P500,000 each.

Sections 8.1 and 28 of the SRC provide that the securities offered to the public should be registered with the commission, while the person dealing in such securities should also be registered as a broker or dealer.

Under its articles of incorporation, the primary purpose of PIHPC includes the investment, purchase, or acquisition, among others of personal property including stocks, bonds, debentures, notes, evidence of indebtedness, contracts and other securities and obligations of any corporation.

However, its sale of securities to the general public did not have a registration statement duly filed with and approved by the commission.

The case stemmed from the commission’s investigation of Emgoldex Philippines, which was found to be engaged in the online solicitation of investments through investment contracts without the necessary approvals from the SEC.

Under the scheme, the public are encouraged to invest at least P36,500 in its gold investment program, in exchange for guaranteed earnings of up to P182,500. Investors are required to recruit at least two more people to make similar investments until they complete the exit table of hierarchy which consists of 15 slots.

The commission subsequently issued a cease and desist order against Emgoldex, where Manuit and Calicdan were found to be among the operators. 

Emgoldex later changed its business name to Global Intergold, then to PIPHC and continued its illegal solicitation activities.

Similarly, Global Intergold was found to be unregistered with the SEC and did not have a license to sell securities to the public.

“Although the Articles of Incorporation of PIPHC bore the signatures of both accused Calicdan and Manuit, they denied being the incorporators of the company and merely averred that they signed the same without understanding its consequences, which is highly unlikely given their participation in the operations of the corporation after its incorporation,” the court held.

It added that “thus, there can be no doubt that both accused participated in recruiting investors and in the activities of the PIPHC when it dealt with securities without any registration or license from the SEC.”