Repa/Repa Paluwagan

October 12, 2021 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT SEC ADVISORY This Advisory is prompted by reports and inquiries received by the Commission from the public asking whether REPA/REPA PALUWAGAN with operations in Bohol, Davao, Bukidnon and Cebu is registered with the Commission and if it can solicit investments from the public. Based on the said reports, the persons behind REPA/REPA PALUWAGAN acting as "administrators" (admins) and "sellers," communicates with their victim-buyers thru contacting them via Facebook, Messenger or other chat groups and personal transactions and offering them "limited slots" for investment packages where one may invest Php50,000.00 promising a return of Php20,000.00 or an equivalent of 40% interest rate of return in just a short period of time of two (2) weeks . Slots for other investment packages being offered that came to the attention of the Commission are, as follows: Php1.5k turns to Php2.5k, Php2.5 turns to Php4k, Php5.5k turns Php7k, Php9k turns Ph13k, Php14k turns to Php25k, Php25k turns to Php40k and Php28k turns to Php50k, all in a matter of two weeks or even less. For the information and guidance of the public, REPA/REPA PALUWAGAN does not appear as a registered corporation or partnership. Further, it is NOT AUTHORIZED to solicit investments/placements from the public nor to issue investment contracts and other forms of securities since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 12 of the Securities Regulation Code. The income generated by the company does not appear to come from legitimate business sources but solely from the investments being paid by its current investors and by the newly recruited members. These false representations of lucrative return of investment within a short period of time from apparently legitimate sources effectively lures the public to invest their hard-earned money to their company. The operations of this entity is a "Ponzi Scheme" which is defined as an investment fraud that involves the payment of purported returns to existing investors from funds contributed by the new investors. They often recruit new investors by promising to invest their funds in opportunities claimed to generate high returns of investment. Thereafter, if there will be difficulties in recruiting new investors or when a large number of existing investors opt to cash out, the Ponzi scheme will collapse or result in a total breakdown and the new investors at the bottom of the line of the pyramid will not receive their returns anymore. Applying the Howey Test as explained in the case of Power Homes Unlimited vs. SEC (G.R. No. 164182, February 26, 2008), REPA/REPA PALUWAGAN's investment packages being offered before the public is an investment contract under the Commission's regulatory power. Their activities involving the offer and sale of securities to the public where their investors need not exert any effort other than to invest or place money in its scheme in order to earn profit should be registered and controlled by the Commission. Briefly, an "investment contract" exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others which prominent on REPA/REPA PALUWAGAN's scheme. Therefore, REPA/REPA PALUWAGAN's lack of juridical personality and registration pertaining to its securities with the Commission make its activities illegal, fraudulent and injurious to the investing public. Further, the offering and selling of securities in the form of investment contracts using the Ponzi Scheme which is fraudulent and unsustainable, is NOT a registrable security. The Commission will not issue a License to Sell Securities to the Public to persons or entities that are engaged in this business or scheme. Hence, the public is strongly advised NOT TO INVEST or STOP INVESTING in any scheme offered by REPA/REPA PALUWAGAN or such other entities similarly engaged in investment contracts without prior registration from the Commission. The public is again reminded that investing in such an unregulated entity lacks investor protection because it is not covered by prudential and market conduct requirements applicable to licensed and authorized operations. Accordingly, the Commission warns all unscrupulous individuals and/or entities that strict penalties are imposed for violations of the Securities Regulation Code, the Revised Corporation Code, and such other rules and regulations enforced by the Commission . Those who act as salesmen, brokers, dealers or agents of such unauthorized entities like the operators, admins and sellers of the Facebook Page or other similar social media of REPA/REPA PALUWAGAN in selling or convincing people to invest in their investment scheme offered including solicitations and recruitment through the internet may likewise be criminally prosecuted and penalized with a maximum fine of Five Million pesos (P5,000,000.00) or a penalty of Twenty-one (21) years of imprisonment or both pursuant to Sections 28 and 73 of the SRC . In the same manner, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public similar to and the operators of the REPA/REPA PALUWAGAN may incur criminal liability, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of SEC vs. Oudine Santos (G.R. No. 195542, 19 March 2014). The names of all those involved will also be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be assessed correspondingly. Should you have any information regarding any investment solicitation activity by any individual or group of individuals representing REPA/REPA PALUWAGAN , please send your report to the EIPD at [emailprotected]. For the guidance of the public. Pasay City, October 12, 2021.