The Department of Justice (DoJ) has assigned a prosecutor to conduct the preliminary investigation of the criminal complaints filed by the Securities and Exchange Commission (SEC) against the owners and officers of Maria Francesca Tan (MFT) Group and Foundry Ventures I Inc. for alleged illegal investment activities.
Prosecutor General Benedicto Malcontento said that the DoJ received the case last 15 April.
SEC filed criminal complaints with the DoJ against the firms for violation of Sections 8, 26 and 28 of the Republic Act 8799, the Securities Regulations Code (SRC), concerning section 6 of RA 10175 or the Cybercrime Prevention Act of 2012.
The MFT Group of Companies and Foundry Venture was accused of violation of section 54.1(c), about section 54.2 of the SRC, and Section 177 of RA 11232, the Revised Corporation Code and SRC Rule 68, in connection with material misrepresentations in their audited financial statements.
The DoJ was told that the criminal charges stemmed from complaints submitted by several investors who participated in the investment scheme of the MFT Group which later transitioned to Foundry Ventures.
Returns guaranteed
It averred that the MFT Group allegedly promised Guaranteed returns ranging from 12 percent to 18 percent of the amount they invested which was considered as interest income.
The scheme, according to the SEC, was perpetuated through the issuance of post-dated checks reflecting one percent to 1.5 percent monthly interest to investors who were given either a promissory note or borrower-lender agreement as proof of their investment.
The SEC said under Section 8 of the SRC, “securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.”
Also, Section 26.3 of the SRC states that it is “unlawful for any person, directly or indirectly, in connection with the purchase or sale of any securities, to engage in any act, transaction, practice, or course of business which operates or would operate as a fraud or deceit upon any person.”
Section 28 of SRC provides that “no person shall engage in the business of buying or selling securities in the country as a broker or dealer, or act as a salesman or an associated person of any broker or dealer unless registered as such with the Commission.”
The SEC complaint said that the MFT Group of Companies and its officers and directors were also liable for 17 counts of misrepresentations in its 2018 to 2021 audited financial statements (AFS) by reflecting dividend income which has no basis.