In Re: ETXT Business Solutions, Inc.

April 9, 2008 SEC ADMINISTRATIVE CASE NO. 03-08-002 IN RE: ETXT BUSINESS SOLUTIONS, INC. FOR: REVOCATION OF CORPORATE REGISTRATION WITH PRAYER FOR ISSUANCE OF A CEASE AND DESIST ORDER ORDER For consideration of the Commission is the prayer of petitioner Compliance and Enforcement Department for the issuance of a Cease and Desist Order against respondent ETXT BUSINESS SOLUTIONS INC., as contained in the Petition for Revocation of Certificate of Registration dated 13 March 2008. caEIDA The facts of the case are as follows: Respondent ETXT BUSINESS SOLUTIONS, INC. was registered with this Commission on 3 April 2007 and was issued Certificate of Registration No. CS200705173. 1 Respondent was organized primarily to engage in the business of trading of goods such as prepaid cards and general merchandise on wholesale/retail business. 2 Respondent holds office at No. 81 ROSCAR Building, EDSA, Mandaluyong City. On 10 September 2007, petitioner received an e-mail from one "Jon B" with the e-mail address [emailprotected], who wanted to verify whether the investment scheme being offered by respondent is legal. 3 In said letter, the subject activity of respondent is its act of inviting investors to join in income generating business ventures through the internet . The e-mail provided a link to the forum wherein respondent made such an offer. Petitioner inquired from the Corporate Finance Department ("CFD") of this Commission whether respondent is a registered issuer of securities. CFD certified that respondent is not a registered issuer of securities under Sections 8 and 12 of the Securities Regulation Code ("SRC") and is not licensed to offer or issue securities to the public. 4 Petitioner also inquired from the Cooperative Development Authority (CDA) whether respondent is registered with them. On 4 October 2007, the CDA issued a certification that ETXT is not registered with them. 5 On 19 October 2007, the Department of Trade and Industry (DTI) informed the CED that their available records do not show the registration of the business name ETXT Business Solutions, Inc. 6 Petitioner conducted its own investigation and the result of the same are as follows: "12. The result of the investigation showed that ETXT Business Solutions, Inc. offers investment contracts to the public in the following scheme: The company has two (2) products namely, the Classic Retailer Entry and the Classic Dealer Entry. In the Classic Dealer Entry, the investor may choose among three (3) different entries by paying One Thousand Dollars (USD1,000.00), Three Thousand Dollars (USD3,000.00), or Five Thousand Dollars (USD5,000.00). Each entry has a corresponding package containing different products or benefits. Investors under this entry are awarded with a company "profit share" in the amount of US$62.50 for the US$1,000 entry, US$187.50 for the US$3,000.00 entry, and US$312.50 for the US$5,000.00 entry, all of which are given every week for a period of thirty (30) weeks. Under ETXT's so-called "dealership agreement" once the dealer invests in the corporation, he will have a guaranteed share in the profit of the corporation for the period provided in the contract. "Investors" under the Classic Dealer Entry are also given "stock points" which vary from 10, 30, and 50 points depending on the amount of "investment". These points will then be applied for stock dividends with the SEC after the end of the thirty (30) weeks contract. TSacID ETXT also uses a binary and uni-level program where investors receive a direct "referral incentive" per person who becomes his or her downline. If there is a pairing among the downlines, said investor receives an additional pairing incentive." 7 It was also discovered that respondent conducted Business Orientation Seminars at its office wherein prospective investors were invited to become dealers of the corporation. 8 The investigating team was able to obtain a copy of the ETXT Dealership Agreement during one of these Business Orientation Seminars. 9 This investment scheme was also offered by respondent through the distribution of flyers which were given out to the public. The respondent also generated advertisement through the internet. 10 The petition includes copies of the flyers containing a description of the investment scheme of respondent. 11 There being prima facie evidence that respondent is engaged in the unauthorized selling and/or offering securities for sale without license to do so, respondent ETXT BUSINESS SOLUTIONS, INC., its respective officers, directors, representatives, agents and any and all persons, conduit entities and subsidiaries claiming and acting for and in behalf of respondent are hereby ordered to immediately CEASE AND DESIST from further selling and offering securities to the public. Pursuant to Section 64.3 of the SRC and to Section 10-4 of the 2006 Rules of Procedure of this Commission, respondent may file a formal request or motion for the lifting this Order within a non-extendible period of five (5) business days from receipt of this Order. aEHTSc SO ORDERED. Mandaluyong City. April 9, 2008. (SGD.) FE B. BARIN Chairperson (SGD.) MA. JUANITA E. CUETO Commissioner (SGD.) JESUS ENRIQUE G. MARTINEZ Commissioner (SGD.) RAUL J. PALABRICA Commissioner (SGD.) THADDEUS E. VENTURANZA Commissioner Footnotes 1. Annex "A" of the Petition. 2. Annex "B", supra. 3. Annex "C", supra. 4. Annex "H", supra. 5. Annex "G", supra. 6. Annex "T", supra. 7. Petition, par. 12. 8. Petition, par. 13. 9. Annex D of the Petition. 10. Petition, par. 14. 11. Annexes "E" and "F" of the Petition.