In re Greenlife Leisure Farms, Inc.

September 5, 2017 SEC CDO CASE NO. 04-17-041 IN THE MATTER OF GREENLIFE LEISURE FARMS, INC. AND/OR GREENLIFE LEISURE FARM AND DEVELOPMENT, INC. ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT , movant . DECISION This resolves the Motion to Lift CDO 1 filed on 31 July 2017 as well as the Motion to Admit Motion to Lift CDO 2 filed on 1 August 2017 (" Motions ") by Respondents GREENLIFE LEISURE FARMS, INC. (" GREENLIFE FARMS ") AND GREENLIFE LEISURE FARM AND DEVELOPMENT, INC. (" GREENLIFE DEVELOPMENT "). On 18 May 2017 , the En Banc issued a Cease and Desist Order (" CDO ") against Respondent corporations GREENLIFE FARMS and GREENLIFE DEVELOPMENT for " engaging in activities of selling and/or offering for sale securities in the form of investment contracts or any others of the same nature ." The CDO clearly stated that: "In accordance with the provisions of Sec. 64.3 of SRC and Sec. 4-3 3 of the 2016 Rules of Procedure of the Commission, the parties subject of this Cease and Desist Order may file a request for the lifting thereof within five (5) days from receipt hereof." (Emphasis supplied) In addition, Section 4-3 (c) of Rule IV of the 2016 SEC Rules of Procedure provides that: "x x x if the person subject of the CDO fails to file the appropriate pleading within the period prescribed in these Rules, the CDO shall be deemed permanent x x x." (Emphasis supplied) On 25 May 2017 , based on records, the CDO was served on the Respondents. 4 On 31 July 2017 , the Motion to Lift CDO was filed. On 1 August 2017 , the Motion to Admit Motion to Lift CDO was filed. These Motions state that the Respondents could not file a timely Motion to Lift CDO because the President of both corporations, Vince Lopez, was suffering from an ailment called "stress response syndrome." On 14 August 2017 , the En Banc issued an Order directing the movant ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT (EIPD) to file its Comment/Opposition to the instant Motions. On 18 August 2017 , the EIPD filed its Comment/Opposition, arguing that: (a) The Motions were filed "way beyond" n the reglementary period; 5 (b) The President's incapacity is not an excuse, because the respondent corporations should and could have acted through their Boards; 6 (c) The settlement with the private complainant, Willie B. David, does not dispose of the case, because respondents admit to selling securities. The instant Motions have no merit whatsoever. First , the CDO has become Permanent from the mere lapse of time . Reckoned from 25 May 2017, Respondents needed to file their Motion to Lift by 30 May 2017, otherwise it would become permanent. No Motion to Lift was filed on or before 30 May 2017 . Moreover, Respondents admit 7 that "[n]o responsive pleading was filed during the reglementary period x x x" The CDO thus became ipso facto Permanent. Second , the Respondents cannot legally claim that they are entitled to special consideration because their President, Vince Lopez, is suffering from an ailment ( i.e. , "stress response syndrome") . It is elementary in Corporation Law that a corporation is a separate individual 8 and acts through its Board. 9 It is thus untenable that the inability of Respondents' President amounts to inability of the corporations as well. Otherwise, the respondents and their Boards would be admitting that they are all mere alter egos of Vince Lopez. The sheer length of time is also telling. The Motions were filed almost two months after the lapse of the period and this is unjustifiable. Third , the Respondents admit that they engaged in the selling and/or offering for sale of securities without a license, which is the very basis of the CDO . The CDO alleges that the Respondents and/or sold securities from 2010 10 onwards. The CDO also alleges that Willie B. David and many others purchased securities in 2010 . 11 Respondents do not deny these allegations, rather they admit them. On Page 2 of their Motion to Lift CDO, the Respondents clearly stated that: Since the year 2012 , Respondent-Movant had [sic] a lready stop [sic] selling and/or offering for sale securities in the form of investment contract or membership stock certificates. (Emphasis supplied) Having established that the respondents engaged in the "selling and/or offering for sale securities in the form of investment contract or membership stock certificates" prior to 2012, their subsequent effort to "already stop" does not eliminate the necessity for the CDO. The EIPD correctly pointed out in its Comment/Opposition that: Precisely, the very basic purpose of the CDO is to prevent the party subject of a CDO from either continuing or repeating the commission of prohibited acts and practices and other similar future violations. 12 Fourth , the Respondents wrongly assume that a private complainant's withdrawal amounts to nullification of the CDO . Respondents attached 13 a "Release, Waiver and Quitclaim," allegedly signed by the private complainant Willie B. David to their Motion to Lift CDO. However, Respondents failed to notice that this case was brought by the EIPD, based upon their own investigative efforts. It was the EIPD which moved for the ex-parte issuance of a CDO. The EIPD has not withdrawn . Therefore, the case will persist even if there is no longer any private complainant. WHEREFORE , premises considered, the Cease and Desist Order dated 18 May 2017 became permanent upon the lapse of the reglementary period without the filing of a Motion to Lift, and because no meritorious reason for the delay was put forth by the respondents, the Motion to Lift CDO filed on 31 July 2017 and the Motion to Admit Motion to Lift CDO filed on 1 August 2017 are hereby DENIED . SO ORDERED. Pasay City, Philippines, September 5, 2017. (SGD.) TERESITA J. HERBOSA Chairperson On Official Business ANTONIETA F. IBE Commissioner (SGD.) EMILIO B. AQUINO Commissioner On Official Business EPHYRO LUIS B. AMATONG Commissioner (SGD.) BLAS JAMES G. VITERBO Commissioner Footnotes 1. Dated 28 July 2017. 2. Dated 28 July 2017. 3. See Rule IV. Cease and Desist Orders and Injunctions , 2016 SEC Rules of Procedure. 4. In both Motions, the Respondents corroborate that the CDO was served " sometime in the last week of May 2017 ." 5. Paragraph 2 of the EIPD's Comment/Opposition filed on 18 August 2017. 6. Paragraph 3 of the EIPD's Comment/Opposition filed on 18 August 2017. 7. Page 1 of Motion to Lift CDO filed 31 July 2017. 8. Section 2 of the Corporation Code; also Article 44 of the Civil Code. 9. Section 23 of the Corporation Code. 10. Narrative on Pages 3-6 of the Cease and Desist Order dated 18 May 2017. 11. Id . 12. Paragraph 7 of EIPD's Comment/Opposition filed 18 August 2017. 13. Annex 1 of Motion to Lift CDO filed 31 July 2017. n Note from the Publisher: Written as ""way beyond" beyond" in the original document.