SEC guarantees prison sentence for Emgoldex operators

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

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

Manuit and Calicdan were sentenced to up to 10 years in prison and a £500,000 fine.

Articles 8.1 and 28 of the SRC regulate that securities offered to the public must be registered with the commission, and the person who deals with such securities must also be registered as a broker or dealer.

Pursuant to its articles of incorporation, PIHPC’s primary purpose includes, among others, the investment, purchase or acquisition of personal property, including stocks, bonds, notes, promissory notes, proofs of debt, contracts and other securities and obligations of any company.

However, there was no registration statement duly filed with and approved by the commission regarding the sale of securities to the public.

The case stemmed from the commission’s investigation into Emgoldex Philippines, which was found to have solicited investments online through investment contracts without obtaining the necessary approvals from the SEC.

Under the programme, the public is encouraged to invest at least P36,500 in the gold investment scheme in exchange for guaranteed returns of up to P182,500. Investors need to hire at least two more people who will make similar investments until they complete the exit table of the hierarchy consisting of 15 slots.

The Commission subsequently issued a cease and desist order against Emgoldex, where Manuit and Calicdan were identified as among the operators.

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

Similarly, it was found that Global Intergold was not registered with the SEC and was not licensed to sell securities to the public.

“Although the PIPHC Articles of Association bear the signatures of both defendants Calicdan and Manuit, they denied being the founders of the company and claimed that they simply signed the same agreement without understanding its consequences, which is highly unlikely considering their involvement in the operations of the company. “after the establishment of the company,” the court said.

“Therefore, there can be no doubt that both defendants participated in the investor recruitment and activities of PIPHC while dealing in securities without any registration or license from the SEC,” he added.