Banned scammer returns as new firm

Like a stubborn weed, a company that regulator Securities and Exchange Commission recently ordered to stop operating turned out to have been the rebirth of another company that had been earlier shuttered.

Documents provided to the DAILY TRIBUNE showed that Superbreakthrough Enterprises Corp., on which the SEC on 5 December slapped a cease and desist order for soliciting investments from the public, and AlphanetWorld Corp, operating under the name NWorld, which was permanently barred from soliciting investments last April, were owned and operated by the same person — Julius Allan Nolasco.

The SEC papers showed Superbreakthrough Enterprises had been doing business under the name 1UP Time, which was engaged in soliciting, offering, and selling securities in the form of investment contracts without a license.

The company was barred from transacting any business involving funds in its depository banks and from transferring, disposing, or conveying any assets to ensure the preservation of the interests of its investors.

The firm was likewise ordered to remove its internet presence relating to the illegal investment scheme.

In a resolution dated 19 July, the SEC denied AlphanetWorld's motion to lift a 23 February cease and desist order for lack of merit.

The SEC, in effect, upheld its findings that NWorld was engaged in the sale of securities in the form of investment contracts, and was in continuous violation of Section 8 of the Securities Regulation Code.

AlphanetWorld, in its motion to lift the CDO, argued that the purchase of its products and packages were plain sales transactions, in contrast to the SEC's finding that it had engaged in the sale of securities.

Nolasco is also a former president of NWorld. His company had been offering and selling investment packages ranging from P4,750 to P19,000 in exchange for NWorld products and a guaranteed monthly return of up to P127,000.

Transactions were done through the company's official webpage, which was the same scheme employed with Superbreakthrough.

Investors were promised discounts of up to 30 percent for every purchase of NWorld products, referral bonuses, and an additional P25,000 when they met the quota of 25 pairs of recruits.

The scheme involved the sale and offer of securities to the public in the form of investment contracts, where a person invested money in a common enterprise and was led to expect profits primarily from the efforts of others, according to the SEC.

AlphanetWorld was registered with the SEC but never secured a secondary license from the commission as an issuer of securities or a broker-dealer, nor did it register any securities for public offering under the SRC.

The SEC discovered the connection between AlphanetWorld and Superbreakthrough while monitoring Nolasco's activities.

Investment trick

It found that he had formed the new company and offered investment packages consisting of health, wellness, skincare, and personal care products through social media platforms such as YouTube and Facebook.

It sold packages priced from P10,000 to P188,000, promising returns ranging from 25 percent to 35 percent worth of product discounts, recruitment bonuses, and other incentives.

"A careful examination and analysis of the investment scheme of 1UP Time would readily show that its success and viability were heavily dependent on recruitment and/or the entry of new investors who were guaranteed P500 per new recruit/referral," the SEC said in its cease and desist order on the Nolasco firm.

The SEC cited Section 8 of Republic Act 8799, or The Securities Regulation Code, in issuing the CDO.

The provision bars the sale or offer for sale or distribution of securities within the Philippines without a registration statement duly filed with and approved by the SEC.

Like AlphanetWorld, Superbreakthrough was registered with the SEC as a corporation but did not secure a secondary license to sell or offer securities to the public.