SEC freezes Novaluxia funds, assets

The Securities and Exchange Commission (SEC) has frozen transactions involving Novaluxia’s bank funds and barred the disposal of its assets, moving to preserve money and properties for investors as it cracks down on the company’s unauthorized investment-taking activities.

Citing a cease and desist order dated 29 September, the SEC said on Friday that its Enforcement and Investor Protection Department (EIPD) prohibited Novaluxia/Novaluxia Innovation Corp. from transacting any business involving funds held in its depository banks.

The company was also barred from transferring or disposing of assets and properties under its control to preserve them for the benefit of investors.

The SEC likewise ordered Novaluxia, its officers, representatives, and agents to stop offering unregistered securities and halt its online activities related to the scheme.

An EIPD investigation found that while Novaluxia is registered as a corporation, it does not have the secondary license required to solicit investments or sell securities to the public.

Under the scheme, Novaluxia allegedly encouraged users to download its app and invest between P1,000 and P5,000 with the promise of earnings within a short period.

Members were automatically included in a “group buying” activity to supposedly purchase products through the app's Novabolt feature at lower prices. They were also included in a purported raffle hosted by artificial intelligence.

The SEC determined that the arrangement constituted the sale of unregistered securities in the form of investment contracts.

The order followed a Sept. 28 SEC advisory warning potential investors that Novaluxia was not authorized to solicit investments.

Novaluxia later claimed that the SEC had agreed to remove the advisory, citing a certification from the regulator's Office of the General Counsel stating that it was not a party to any case before the SEC.

“The SEC denies entering into any agreement for the supposed removal of the advisory against Novaluxia,” the regulator said.

The SEC clarified that the certification covered only cases pending before the Office of the General Counsel and the Commission En Banc, and excluded orders issued by other departments such as the EIPD.

“Unless the company secures the necessary licenses that will legitimize its investment-taking activities, all materials pertaining to its unauthorized investment activities will remain available for the public’s reference,” the SEC said.

The regulator urged investors to verify entities offering investment opportunities through its official channels and report potentially unauthorized or fraudulent schemes.