SEC issues CDO vs investment group linked to Isabela teacher

Local legislators are calling on the Department of Education (DepEd) to reject the early retirement bid of a school head teacher allegedly involved in an illegal investment scheme.

The Sangguniang Panlungsod of the City of Ilagan urged DepEd Region II-Cagayan Valley to hold the retirement of Jovy Alicaycay Arzaga. The request follows allegations that Arzaga recruited investors for Fidelity Capital Investment Group (FCIG), an entity the Securities and Exchange Commission (SEC) says is unauthorized to solicit funds from the public.

During a council session, Arzaga appeared alongside fellow recruiters Cristelle Macalling-Cabalonga and Dhomgerald Macalling Hidalgo. Arzaga testified that she was unaware the organization required SEC registration to operate legally in the Philippines.

"Our only basis, just like Ms. Cabalonga stated, was the ASIC," Arzaga said, referring to the Australian Securities and Investments Commission. "We do not know about SEC. Since ASIC is internationally recognized, we thought it’s already OK."

Arzaga admitted to inviting seven to eight people to join FCIG, noting that the company’s structure rewarded those who brought in new members. "If you want more income, you need to invite investors," she said.

However, local officials and regulators clarified that international recognition does not bypass Philippine law.

"They have no license to solicit investment here unless they secure a license from the SEC. That’s why their operations are illegal," said Councilor Rolly Tugade.

Atty. Fiels Dominique Gamboa, a representative for the SEC, said the penalties for illegal solicitation are severe. Convicted individuals could face seven to 21 years in prison and fines ranging from P50,000 to P5 million.

Gamboa confirmed that several complainants have already approached the SEC to file cases against FCIG recruiters, noting that promoting such schemes on social media constitutes illegal solicitation.

The DepEd Schools Division Office has already taken notice as a 4 February memo signed by Schools Division Superintendent Eduardo Escorpiso Jr. recommended a preliminary fact-finding investigation into Arzaga's involvement.

Just two days later, on 6 February, Arzaga submitted her letter of intent for early retirement.

Tugade argued that the retirement must be suspended while the investigation is ongoing, citing the potential for criminal liability and the required 90-day clearing period for administrative turnovers.