Legacy Consolidated Plans, Inc., Legacy Card, Inc., Galaxy Realty & Holdings, Inc., Shining Armor Property, Inc., One Realty Corporation, Onecard Company, Inc.

Republic of the Philippines SECURITIES & EXCHANGE COMMISSION SEC Building, EDSA, Greenhills, Mandaluyong City IN THE MATTER OF: SEC CASE NO. 02-09-006 LEGACY CONSOLIDATED PLANS, INC., LEGACY CARD, INC., GALAXY REALTY & HOLDINGS, INC., SHINING ARMOR PROPERTY, INC., ONE REALTY CORPORATION, ONECARD COMPANY. INC. COMPLIANCE AND ENFORCEMENT DEPARTMENT, Petitioner. X ORDER This resolves the Motion for Issuance of Permanent Cease and Desist Order dated 31 March 2009 filed by petitioner Compliance and Enforcement Department (CED). The brief background of the case is narrated as follows: company duly registered with the Securities and Exchange Commission on 26 February 1988 with Certificate of Registration No. 0000148826. The primary LEGACY CONSOLIDATED PLANS, INC. (LEGACY, for brevity) is a pre-need purpose of respondent LEGACY, as stated in its amended Articles of Incorporation, is: "To engage in the business of establishing, organizing, developing. conducting, managing, maintaining, operating, promoting, marketing, and selling educational assistance and pension plans, as well as other type of pre-need plans and services, to be delivered in the future to subscribers, purchasers or plan holders; to manage, buy, sell, all types of merchandise, equipment and/or services pertaining to the pre-need businesses. Page 1 of 5 The instant case stemmed from the abrupt closure by LEGACY of its head and branch offices, and discontinuance of its business operations without prior notice to the SEc and its investors. As a result of said closure, numerous investors went to the SEC, through the CED, to inquire about the legality of their investments with respondent LEGACY, and to seek the assistance of the SEC for the recovery of their investments. According to the complainants-investors, respondent LEGACY, through its sales-agents/salesmen, enticed them to invest in various investment opportunities offered by the said corporation. These investment products are: (1) Double Your Money Program (3 year plan or 5 year plan); (2) Mutual Fund (3) Pre-need Buy-Back with Deed of Assignment; (4) Motor Vehicle with Money Back; and (5) Maxicore. Based on the representations of respondent LEGACY's sales-agents/salesmen, these investment products offer rates of interest as high as one hundred percent (100%), and the investment is safe and secure because the same will be paid through postdated checks payable on equal' monthly and/or quarterly basis, which were actually issued to the investors upon receipt of their investments. Based on the Complaints-Affidavits and various documents received by CED, the modus operandi of respondent LEGACY is to employ and use:its sales- agents/salesmen to offer and sell its investment products to the public. Once an investment is made, the investor is given a set of documents, such as: (1) Official Receipt, (2) Pension Plan Application Form, (3) Pre-need Buy-Back Agreement with Deed of Assignment and (4) Postdated Checks, as proofs of investment. The Complaints-Affidavits show that the official receipts issued to the investors to acknowledge receipt of their investments bear the name of LEGACY CONSOLIDATED PLANS, INC., but the postdated checks given to the investors as assurance for the payment of the maturity value or proceeds of their investments PLANS, INC., the obligation for the payment of the investors' claims representing are issued by its affiliate and subsidiary corporations which are LEGACY CARD ONE REALTY CORPORATION and ONECARD COMPANY, INC. Stated otherwise, INC., GALAXY REALTY & HOLDINGS, iNC., SHINING ARMOR PROPERTY, INC.. while the investors' investments are received by LEGACY CONSOLIDATED the maturity value or proceeds of their investments are assumed by its affiliates. Upon the request of the CED, the Corporate Finance Department (CFD), issued a negative certification stating, among others, that LEGACY has rio license to sell securities aside from pre-need plans namely: education, pension and life/memorial plans. Similarly, the Market Regulation Department ("MRD" for brevity) issued a negative certification stating, among others, that the names of the sales agents/salesmen, as mentioned by the investors in their respective Complaints-Affidavits, are not listed as authorized or licensed sales- agents/salesmen to offer or sell securities to the public. Cease and Desist Order ("CDO", for brevity) enjoining respondents LEGACY On 26 February 2009, the SEC, upon Motion filed by the CED,tissued a ( Page 2 of 5 person/s acting for and in behalf, and such other person directing and controlling the activities of such corporations, officers, directors, representatives HoLdingS, Inc., SHining ArmOr CORPORATION, ONECARD COMPANY, INC., any of their representatives or any CONSOLIDATED PLANS, INC., LEGACY CARD, INC., GALAXY REALTY & f PROPERTY INC., ONE REALTY salesmen and agents from a) transacti ig an and all business involving the funds in its depository banks, and b) from , disposing or conveying in any other manner any and all asse personal, including bank deposit and tax credit certificat hich the named persons herein may have any interest. claim. ASM C hatsoever. whether directly or indirectly, under their cusfody excludin trust funds or assets thereof. immediately upon receipt of the Order. il further order from this Commission. Moreover, subject corporations and any and all of its affiliates, officers, sales agents/salesmen or representative are also restrained from selling, offering any and all securities/investment contracts to the public in the absence of requisite license under the Securities and Regulation Code (SRC) and the existing rules and regulations of the SEC. On the same day of the issuance of the CDO, it was posted on the SEC website and continues to be posted therein. On 27 February 2009, copies of the CDO were personally served by SEC liaison officers on the incorporators, officers HOLdINGS, INC., SHINING ARMOR PROPERTY INC., ONE 'REALTY directors, representative salesmen and agents of respondents LEGACY CONSOLIDATED PLANS, INC., LEGACY CARD, INC., GALAXY REALTY & CORPORATION, ONECARD COMPANY, INC., and their affiliate corporations namely, LEGACY CONSOLIDATED ASSETS HOLDINGS, INC. FUSION CAPITAL G.S. FUND, INC., LEGACY H.Y. FUND, INC. at their respective addresses appearing in their articles of incorporation. On 28 February 2009, the CD0 was published in the Philippine Daily Inquirer. CORPORATiON, LEGACY MOTOR, INC., SCHOLARSHIP PLANS PHILS, INC. CONVENTIONAL REALTY COPRPORATION, LEGACY T.D. FUND, INC.,:LEGACY The respondents and all the persons against whom the CDO were issued within which to file a formal request or motion for the lifting of the CDO. were given a non-extendible period of five (5) working days from receipt thereof and UCPB Savings Bank filed their respective motion to lift the subject CDO. The respondents LEGACY CONSOLIDATED PLANS, INC., LEGACY CARD, INC., GALAXY Based on the records, only Atty. Monina Vierneza Dio, Mr. John Y. Gaisano motion for the lifting of the said CD0 pursuant to Section 10-3 of the 2006 Rules CORPORATION, ONE CARD COMPANY, INC., and their affiliate corporations namely, LEGACY CONSOLIDATED ASSETS HOLDINGS, INC. FUSION CAPITAL CorPorAtiOn, LEGACY MOToR, InC., SCHoLArSHiP PLAnS PHiLS, INC. G.S. FUND, INC., LEGACY H.Y. FUND, INC., have not filed any formal request or of Procedure of the Securities and Exchange Commission. REALTY & HOLDINGS, INC., SHINING ARMOR PROPERTY INC., ONE REALTY CONVENTIONAL REALTY COPRPORAtION, LEGACY T.D. FUNd, INC., LEGACY The failure of the respondents to file the necessary motion s deemed a Page 3 of 5 waiver on their part to avail for themselves of such remedy. Furthermore. Section 10-5 of the abovementioned Rules provides that if the respondent fails to file a motion to lift CDO within the prescribed period, the Director of the CED may file with the Commission a motion to make the CDO permanent. The Commission resolves to grant the motion. be sold or offered for sale in the Philippines unless said securities are duly Section 8 paragraph 8.1 of the SRC clearly states that "securities shall not registered by the issuer in accordance with the procedure laid out in the SRC and without a registration statement duly approved by the SEC." respondent LEGACY, through its individual sales agents/ salesman and officers. fall within the definition of "securities" under Section 3.1 of the SRC which are In the instant case, the various investment schemes offered and sold by "shares, participation or interest in a corporation or in a commercial enterprise or whether written or electronic in character. It includes: xxx investment contracts, profit-making venture and evidenced by a certificate, contract, instrument, certificates of interest or participation in a profit sharing agreement, certificates of deposit for a future subscription." Regulations of the SRc defines an investment contract as follows: In relation thereto, Rule 3(1)(G) of the Amended Implementing Rules and "G. An investment contract means a contract, transaction or scheme common enterprise and is led to expect profits primarily from the efforts of others. (collectively "contract") whereby a person invests his money in a An investment contract is presumed to exist whenever a person seeks to use the money or property of others on the promise of profits. A common enterprise is deemed created when two (2) or more investors "pool" their resources, creating a common enterprise even if the promoter receives nothing more than a brokers commission." ambit of an investment contract. As gleaned from the allegations and documents submitted by the complainants- investors, the scheme consists in the placement or investment of a certain amount of money by the complainants- investors in a promise of earning profits primarily out of the entrepreneurial and managerial efforts of LEGACY. Complainants-investors are not expected to do anything except to receive the profits of the amount they invested through the checks issued by respondent LEGACY. common enterprise belonging to the respondent LEGACY, in consideration of the The investment scheme of respondent LEGACY falls squarely within the Said investment contracts, being in the nature of securities, are required sold to the general public. However, based on the records of the SEC, no under Section 8 of the SRC to be registered with the SEC before being offered or Page 4 of 5 application for registration of these securities, i.e., investment contracts, was filed by the respondent LEGACY in violation of the provisions of Section 8 of the SRC. As evidenced by the Certification issued by the CFD, respondent LEGACY has no license to sell securities aside from pre-need plans namely: education. the SEC to offer and sell investment contracts to the public. pension and life/ memorial plans. In other words, LEGACY is not authorized by that the respondent corporations, in concert and in connivance with one another. Thus, the evidence on hand so far presented to this Commission shows acceptance of deposits and placement of investment from the general public engaged in the offer and sale of investment contracts, and the solicitation and without the proper authority or license from this Commission, have offered and sold securities without the necessary permit or registration from the SEc. By doing so, respondent corporations have misrepresented to the public that they can issue securities or solicit investments from the general public. affected investors, and in order to prevent further violations and protect the investing public from similar machinations and grave irreparable damage in the future, it is imperative that the Cease and Desist Order dated 26 February 2009 issued by the Commission be made permanent. Considering the gravity of the offenses committed, the multitude of in the Commission, the Cease and Desist Order dated 26 February 2009 is hereby rendered PERMANENT. WHEREFORE, premises considered, and pursuant to the authority vested SO ORDERED. Mandaluyong City, 2 April 2009. FE B BARIN 46.b Chairperson J28 MA. JUANITAE. CUET RAUL J. PALABRICA Commissione Commissioner THADDEUS E. VENTURANZA Commissioner Commissioner age 5 of 5