SEC flags Ponzi-like MCM scheme

The Securities and Exchange Commission (SEC) has cancelled the corporate registration of MCM Royalty Legacy International, Inc. for illegally soliciting investments from the public through Ponzi-like scheme.

Citing an order issued in early February, the SEC’s Enforcement and Investor Protection Department said Friday that the company offered securities to the public without prior registration or license from the Commission.

“The investment scheme of MCM Royalty Legacy also operates to defraud investors as it deceives the investing public by making it appear that they have the authority to deal in securities.

This also amounts to serious misrepresentation as to what they can do or are doing to the damage and prejudice of the investing public,” the order read.

The Commission also imposed a P1 million fine on the company and its president, officers, and directors, and barred its officials from serving as directors of any corporation for five years.

MCM Royalty Legacy’s articles of incorporation list its primary business as wholesale trading of goods and merchandise, with a secondary purpose of online advertising and e-commerce, and explicitly prohibit it from soliciting or accepting investment contracts from the public.

However, the SEC found that the company sold investment contracts disguised as franchise agreements tied to supposed businesses such as travel and tour ticketing services, bill payment, e-loading services, and wellness products.

Investors were lured with packages promising guaranteed profits depending on the amount invested.

The SEC said the scheme was also fraudulent, bearing the hallmarks of a Ponzi scheme, in which payouts to early investors are funded by contributions from later investors.