SEC orders shutdown of outsourcing firm CROWD1

sec orders shutdown of outsourcing firm crowd1 - SEC orders shutdown of outsourcing firm CROWD1

THE Securities and Exchange Commission (SEC) has ordered the shutdown of CROWD1 Asia Pacific, Inc. for operating a “fraudulent investment scheme.”

The commission said on Monday that it had issued on May 12 a cease-and-desist order to the business process outsourcing firm that has been peddling and publicly promoting securities in the form of investment contracts without permits.

The company was found to be selling investments through educational packages for P6,000 and as much as P240,000.

It entices investors with different bonuses, such as a streamline bonus, a binary pairing bonus, a fear of loss bonus, a matching bonus, and a residual bonus from games and gambling apps.

“CROWD1 likewise touts a pairing incentive payable in euros to encourage member-investors to recruit new members,” SEC noted.

The corporate regulator said CROWD1 did not register for a secondary license to sell investment contracts nor registered with the agency to sell these anywhere in the Philippines, pursuant to the Securities Regulation Code.

“[I]t is clear that CROWD1 is not authorized to sell or offer its educational packages to the public because they are securities in the form of investment contracts, and CROWD1 does not have the requisite license from this Commission,” the order read.

The fraudulent scheme will “likely cause grave or irreparable injury or prejudice to the investing public,” it added.

The company claimed it generates income from online games and ushers in generating residual income for its member-investors from affiliate gaming companies, such as AFFIGLO and MIGGSTER.

The SEC has since warned the public of engaging with CROWD1. — Adam J. Ang

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