The Court of Appeals (CA) said the Securities and Exchange Commission was right to issue a cease and desist order (CDO) against Superbreakthrough Enterprises Corp., doing business under the name 1UP Time, for unauthorized solicitation of investments from the public.

In a decision promulgated on Feb. 11, 2025, the Fifth Division of the appellate court rejected 1UP Time’s petition. It ruled that the SEC did not commit grave abuse of discretion when it issued the CDO and subsequently made it permanent.

SEC Chairperson Emilio B. Aquino described the CA decision as “a significant step in protecting investors from unlawful investment schemes and maintaining the integrity of the financial markets.”

“The SEC reiterates its commitment to safeguarding the interests of the investing public and ensuring that entities operating in the Philippines adhere to securities laws,” he added.

Citing an earlier case decided by the Supreme Court, the CA explained that the SEC may validly issue a cease-and-desist order if a proper investigation or verification has been conducted and a finding has been made that the act or practice, unless restrained, will operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice to the investing public.

“A review of the records shows that both requisites were present, thereby justifying the issuance of the CDO,” the CA held.

The appellate court noted that the SEC conducted investigations before issuing the CDO and that 1UP Time was afforded due process because it was informed of the investigation’s findings and given an opportunity to file a motion to lift the order.

It noted that 1UP Time was fully aware of the allegations against it, mainly that its product packages were considered investment contracts.

The SEC issued the CDO against 1UP Time, its President, Juluis Allan Nolasco, its directors, officers, and agents in December 2023 for illegally soliciting investments from the public. The Commission made the CDO permanent in April 2024.

Nolasco has previously been the subject of a CDO for promoting illegal investment activities through Alphanetworld Corporation, otherwise known as NWorld.

The SEC Enforcement and Investor Protection Department’s (EIPD) monitoring resulted in discovering 1UP Time’s activities.

Upon investigation, 1UP Time was found to have offered securities in the form of investment contracts in the guise of selling product packages without a secondary license from the Commission.

These packages include health, wellness, skincare, and personal care products priced from ₱10,000 to ₱188,000. They promise returns ranging from 25 percent to 35 percent on product discounts, recruitment bonuses, and other incentives.

Section 8 of the Securities Regulation Code, states that securities should not be sold or offered without a registration statement duly filed with and approved by the Commission.

“As held by the SEC En Banc, the evidence gathered by the SEC-EIPD showed that 1UP Time’s customers paid money to be placed in a binary system with the expectation of earning profits through the efforts of their recruits. Given this structure, the SEC En Banc concluded that 1UP Time was, in reality, offering unregistered investment contracts to the public,” the CA noted.

It added that, “Since 1UP Time neither obtained a secondary license from the SEC to offer securities nor registered its product packages as securities, its actions were deemed to have operated as a fraud or posed a substantial risk of grave or irreparable harm to investors.