CA upholds SEC order vs 1UP Time

The Court of Appeals (CA) has affirmed the cease-and-desist order (CDO) issued by the Securities and Exchange Commission (SEC) against Superbreakthrough Enterprises Corp., which operates as 1UP Time, for illegally soliciting investments from the public.

In a decision on 11 February, the CA Fifth Division denied 1UP Time’s petition, ruling that the SEC did not commit grave abuse of discretion when it issued the CDO and later made it permanent.

The court cited a Supreme Court ruling that allows the SEC to issue such an order if an investigation confirms that an act or practice, if not restrained, would defraud investors or cause grave or irreparable harm to the public.

“A review of the records shows that both requisites were present, thereby justifying the issuance of the CDO,” the appellate court said.

Probe conducted prior to issuing order

The CA noted that the SEC had conducted investigations before issuing the order and that 1UP Time was given due process, including being informed of the findings and allowed to file a motion to lift the CDO.

The court also emphasized that the company was aware of the allegations against it, particularly that its product packages were classified as investment contracts.

SEC chairperson Emilio B. Aquino welcomed the ruling and called it “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 said.

Order made permanent

The SEC issued the CDO in December 2023 against 1UP Time, its president Juluis Allan Nolasco, and its directors, officers, and agents for engaging in unauthorized investment solicitation. The order was made permanent in April 2024.

Nolasco had previously been subject to a CDO for promoting illegal investment activities through Alphanetworld Corp., also known as NWorld. The SEC’s Enforcement and Investor Protection Department uncovered 1UP Time’s operations through its monitoring activities.

Investigations revealed that 1UP Time was selling product packages — ranging from P10,000 to P188,000 — without the necessary secondary license.

These packages, which included health, wellness, skincare, and personal care products, were structured as investment contracts, promising returns of 25 percent to 35 percent through product discounts, recruitment bonuses and other incentives.

Under Section 8 of the Securities Regulation Code, securities cannot be sold or offered without a registration statement filed with and approved by the SEC.

“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,” it said.