SEC issues advisory vs Zild Telecommunication

THE Securities and Exchange Commission (SEC) has issued an advisory against Zild Telecommunication Repair Services (ZILD TRS) and its owner, warning the public that the entity has been soliciting investments without the required registration or license.

In an April 6 advisory, the regulator said the entity has been enticing the public, particularly overseas Filipino workers, to invest up to P450,000 with a guaranteed 30% monthly return within 30 to 45 days.

The SEC described the offer as indicative of a fraudulent scheme.

“While assuming that the entity may be engaged in a legitimate telecommunications repair related business, such appearance does not confer authority to solicit investments from the public,” the SEC said.

According to the SEC, the arrangement falls under the definition of an investment contract, which must be registered and authorized under the Securities Regulation Code (SRC).

Under the SRC, an investment contract exists when money is placed in a common enterprise with the expectation of profits primarily from the efforts of others.

“However, based on the records of the Commission, ZILD TRS is not registered as a corporation or partnership, and is operating without the necessary license or authority to solicit, accept, or take investments from the public, nor to issue investment contracts or any forms of securities as defined under Section 3 of the SRC,” it said.

The SEC said that promises of quick and high returns are a common sign of fraudulent schemes, which pay earlier investors using funds from new investors instead of legitimate profits.

The regulator advised the public to avoid or stop investing in the scheme. It also warned that those acting as promoters, recruiters, or agents may face criminal liability under Section 28 of the SRC, with penalties of up to P5 million or imprisonment of up to 21 years, or both.

Zild Telecommunication did not immediately reply to an e-mail seeking comment. — Alexandria Grace C. Magno