RIGEN MARKETING

PICC Secretariat Bldg., Roxas Blvd., Pasay City Securities and Exchange Commission Republic of the Philippines Department of Finance COMMISSION EN BANC In the Matter of: RIGEN MARKETING SEC CDO Case No. 06-19-051 ENFORCEMENT PROTECTION DEPARTMENT (EIPD), AND INVESTOR Movant. CEASE AND DESIST ORDER This resolves the Motion for Issuance of a Cease and Desist Order (Motion) filed on June 3, 2019 by the Enforcement and Investor Protection Department (EIPD) agents and any and all persons claiming and acting for and in its behalf, from any praying to enjoin RIGEN MARKETING and it's officers, representatives, salesmen, unauthorized public solicitation of investments and sale of securities in the form of investment contracts. Based on the records of the Commission, RIGEN MARKETING (RIGEN) is not registered with the Commission either as a corporation or partnership. PRODUCT MARKETING" a sole proprietorship whose business name is registered with the Department of Trade and Industry (DTI) under the name of RICO JOHN RIGEN MARKETING appears to be a tradename of "RIGEN WELLNESS COLORINES GARCIA1 a.k.a "John Rigen"2 whose business address at PLJ Bldg., Apoko Road Magugpo East Tagum City DDN 3100. EIPD of a Memorandum dated 07 May 2019 SEC Davao Extension Office (SEC-DEO) return of investment of up to four hundred percent (400%). with attached documents pertaining to RIGEN which was reported to be offering a The investigation against respondent RIGEN stemmed from the receipt by the RIGEN which was attached to the Memorandum that was obtained by SEC-DEO from one of the clients of RIGEN named Rene A. Beduya, would show that the investment scheme of RIGEN involves an investment contract as it contained the following statements in the acknowledgement receipt: A careful examination by the EIPD of the Acknowledgement Receipt issued by a.The deposit of Ten Thousand (P10,000.00) b. The statement: "I/We will be entitled to an incentive not exceeding 400% of my/our payment as soon as the 2 https://www.facebook.com/search/top/?q=Rico John C. Garcia&epa=SEARCH_BOX 1 https://www.facebook.com/JeanELopez/posts/2207043299365559 company can sell the product herein sold to the first minimum eight (8) consumers per batch. authorizing the investment, all duly certified, must be Paragraph I. Purchase Order. Purchase order may be held the resolution of the client's Board of Directors submitted with the application depending on the approval of the RIGEN MARKETING. by any person of legal age or any legal entity regardless of citizenship or nationality. If the client is a corporation, partnership or other legal entity, copies of the articles of incorporation and by-laws, certificate of registration and D The Terms of Conditions in the Acknowledgement Receipt contains the following provisions: "Paragraph II.Right to accept/Reject and Scale Down Applications. Reserves the right to accept reiect or reduce RIGEN MARKETING. the investment applied for in any Application at its sole discretion and in such manner that it may deemappropriate. In the event that this investment to the Client without interest, within seven (7) days from the submission of this Application is not accepted in whole or in part, the company Application. x x x may refund the corresponding ii. Paragraph III. herein sold_to a minimum of eight (8) entry purchase of the RIGEN MARKETING's (400%) capital growth will be based on the product as soon as he/she can sell the product The four.hundredpercent consumers. iii. Paragraph XI. AGREEMENT.This Agreement regulations then existing. shall continue and remain in force until with_the contract or with applicable laws or termination of the investment in accordance iv. NO INVESTMENT ADVICE. The Client hereby acknowledges that RIGEN MARKETING will not accounting advice or advice regarding the suitability or profitability of a security or are not authorized to give any such advice and that the Client will not solicit or rely upon such advice. and does not provide investment, legal, tax, or investment, that RIGEN MARKETING's employees e. ACKNOWLEDGMENT. warrant that in executing this application, understood and have relied solely upon.the investment's prospectus and the terms and conditions investments in the future (if any) shall also be covered by stated on this form. I also acknowledge that additional I/We the undersigned client, have 2 the said prospectus and terms and conditions. I have read and understood, and agreed to be bound by the terms and conditions governing the services to be availed of. I hereby expressly, absolutely, and unconditionally release and indemnify the Company free and harmless from any and all claims, liabilities, obligations, actions, proceedings, loss damage, costs and expenses arising from or in connection information contained in this form or any instruction I will discharge the Company, and undertake to, at all times, with, directly or indirectly, any erroneous or inaccurate provide to the Company. x x x (Emphasis ours) to the EIPD by SEC-DEO, it was likewise stated that: In the "Terms and Conditions" portion of the Acknowledgment Receipt submitted (i) the opening, facilitating, monitoring, improving the quality of. or otherwise servicing the Account and such regulatory, or other obligation. Such processing may be "Processing of Information. The Client authorizes RIGEN Marketing to process, without need of prior notice, any and all information relating to the Account in connection with other products, services, and facilities availed by the Client: (ii) the establishment or continuation of products, services, facilities by the Rigen Marketing; and (iii) compliance by the RIGEN MARKETING with legal, conducted for the duration and even after the cancellation of the Account. The Client likewise authorizes the RIGEN Marketing to process, disclose and share his personal to the RIGEN MARKETING's marketing sorts. As used herein"RIGEN MARKETING" shall include RIGEN information to its relevant marketing teams in relation MARKETING..its subsidiaries. aliases or related companies .andRIGENMARKETING'sagents. ascribed to them under the Data Privacy Act. representatives. outsourced service_providers, while "process" and "processing" shall have the meaning posted on the Commission's website on 24 May 2019 on the activities of respondent RIGEN3. Upon validation of the contents of SEC-DEO's Memorandum, an ADVISORY was Orlando B. Dino Excerpt of the SUN STAR news article is quoted as follows and translated in English using google translate: dated 26 May 2019 that was published and made available in the internet4 entitled "Rigen Wellness Marketing di kabalak-an, Dunay Permit" authored by a certain After the issuance of the Advisory, the EIPD came across a SUNSTAR article Bisaya: sa DTI ug Bureau of Internal Revenue." x x x "Giinong nakarehistro ang rigen wellness product marketing English: Rigen wellness product marketing is registered in DTI and Bureau of Internal Revenue. di-kabalak-an-dunay-permit https:/www.sunstar.com.ph/article/1807265/Superbalita-Davao/Rigen-Wellness-Marketing- ADVISORY on RIGEN posted on the Commission's website dated May 24, 2019. 3 X X X Bisaya: Matod sa tagdulama sa kompanya nga di ilawom sa pagduma sa Securities and Exchange Commission (SEC) ang maong kompanya sanglit usa kini ka sole proprietorship ug di ilawom sa organisasyon, relihiyon, korporasyon o inkorporasyon. X X X English: corporation or incorporation. According to the company, the company does not cover the Securities and Exchange Commission (SEC) because it is a sole proprietorship and is within the organization, religion, Bisaya: miguba kanila sanglit daghan na ang buot moapil sa maong negosyo tungod sa 400% gitanvag nga return of investment Nanaghap ang nagdumala sa kompanya nga daghan ang gustong English: Managers have been hampered by many companies who want to destroy them because many want to join the business because of the 400% proposed return of investment. X X X representations of its investment schemes and to solicit such investment from the the solicitation activities of RIGEN. Findings revealed that a series of Facebook pages public were made publicly available. A careful review of these Facebook pages Marketing @rigenmarketingofficial,6 the official Facebook page of "RIGEN" was public. using the name and logo of RIGEN with promotional products of RIGEN and Facebook posts and promotional Youtube videos5 inviting/soliciting/offering investment to the further disclosed that the public post regarding "PAY-OUT" events of RIGEN even used and attended by its members/agents to disseminate/spread or made On 29 May 2019, the EIPD conducted further investigation via online search on EIPD, the latter foumd sufficient evidence showing that RIGEN is soliciting in its investment scheme. investments from the public employing what is commonly known as a Ponzi scheme Based on the verification and investigation conducted by the SEC-DEO and the We find the Motion meritorious. engaged in the offer and/or sale of securities to the public in the form of investment contracts without the necessary license from the Commission. EIPD's Motion, as supported by substantial evidence, shows that RIGEN is commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character" and includes an "investment contract". Securities are "shares, participation or interests in a corporation or in a money; (2) in a common enterprise; (3) with the expectation of profits; and (4) to be transaction, contract, or scheme whereby a person: (1) makes an investment of In a plethora of cases, it has been stated that an "investment contract" is a https://www.facebook.com/rigenmarketingofficial/ https://www.youtube.com/watch?v=y22-op9fa4U 4 expectation of profits; and (4) primarily from efforts of others.8 in our jurisdiction, to be a security subject to regulation by the Commission, must be proved to be (1) an investment of money; (2) in a common enterprise; (3) with derived solely from the efforts of others.7 This definition has been adopted by the Supreme Court of the Philippines which succinctly stated that an investment contract scheme of respondent RIGEN falls within the ambit of an investment contract because As aptly elucidated by the EIPD, it was able to show that the investment of its essential features, as follows: (1) The investor enters into a contract. There is a placement of money where for a certain sum the investors are guaranteed four hundred percent (400%) return in just thirty (30) days. (2) The money invested is placed in a common enterprise and the investor- member expects to derive profits. As stated under the Acknowledgment Receipt provided by SEC-DEO to EIPD, the four hundred percent (400%) capital growth will be based on the entry purchase of the RIGEN MARKETING's product as soon as he/she can sell the product herein sold to a minimum of eight (8) consumers. (3) Finally, the member-investor expects to earn profits from the entrepreneurial and managerial efforts of others. The investor need not do anything but go to the office of RIGEN and receive the guaranteed return to them. The investors just have to invest money. The PAY-OUT PROCESS i.e, working hours the stipulated in the Terms of Conditions of the The pay-out payment will be received by the client after three-to-five day from this scheme. Acknowledgment Receipt proves that the investors are made to expect profits is not a registered issuer of mutual funds, exchange traded funds and proprietary/non-proprietary shares or membership certificates and timeshares pursuant to Sections 8 and 12 of the Securities and Regulation Code and therefore not licensed to offer or sell such securities to the public." On 3 June 2019 certification from the CGFD stated that "RIGEN MARKETING has not filed nor has any pending application for registration/permit to sell and 12 of the Securities Regulation Code (SRC). Likewise, the Department has not issued Permit to Sell Securities in favor of RIGEN MARKETING. Further, said entity that "RIGEN MARKETING has not registered any securities pursuant to Sections 8 securities." On the other hand, the 3 June 2019 Certification from the MSRD likewise states securities could be offered or sold to the public. contract, the provisions of Section 8.1 of the SRC should be complied with before said Having established that the investment scheme of RIGEN is an investment general public sans the necessary license or permit as attested by the Market Thus, RIGEN has engaged itself in offering or selling such securities to the Power Homes Unlimited Corporation v. Securities and Exchange Commission G.R. No. 164182, Securities and Exchange Commission v. W.J. Howey Co 328 U.S. 293, 66 S. Ct. 1100, 90 L.Ed. 1224, February 26, 2008. 163 A.L.R. 1043 (1946) S Securities Regulation Department (MSRD) and Corporate Governance and Finance Department (CGFD) of this Commission. scheme as it promises an exorbitant rate of return with little or no risk at all to investors as exemplified in the case of People of the Philippines vs. Palmy Tibayan and tat: Rico Z. Puerto (G.R. Nos. 209655-60, January 14, 2015), where the Supreme Court held Worse, the investment scheme of RIGEN has the characteristics of a Ponzi which works only as long as there is an ever increasing to continue paying the promised profits to early round of investors and then absconds before anyone else shows up to collect. Necessarily, Ponzi schemes only last fraud that involves the payment of purported returns to stage investors to create the false appearance that not an investment strategy but a gullibility scheme, number of new investors joining the scheme. It is difficult to sustain the scheme over a long period of time because weeks, or months at the most." (Underscoring added for emphasis investors. Its organizers often solicit new investors by generate high returns with little or no risk. In many Ponzi schemes, the perpetrators focus on attracting new money to make promised payments to earlier- investors are profiting from a legitimate business. It is the operator needs an ever larger pool of later investors investors. The idea behind this type of swindle is that the "con-man" collects his money from his second or third existing investors from funds contributed by new promising to invest funds in opportunities claimed to "To be sure, a Ponzi scheme is a type of investment registration. Thus, Section 64 of the Securities Regulation Code would apply, to wit: engaged in offering for sale securities to the public through indiscriminate or random offering online' promoting its investment scheme to potential investors without prior The EIPD adduced sufficient evidence to support its allegations that RIGEN is without the necessity of a prior hearing if in its judgment or irreparable injury or prejudice to the investing public. motu proprio, or upon verified complaint by any aggrieved party, may issue a cease and desist order the act or practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave Commission, after proper investigation or verification, SEC. 64. Cease and Desist Order. - 64.1. The to the public without the necessary license or permit will operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice e to the further offering and selling unregistered securities to the public. Otherwise, to allow RIGEN to continue soliciting investments and/or selling or offering for sale securities Thus, it is necessary that a Cease and Desist Order be issued to enjoin RIGEN from The Commission is duty-bound to protect the interest of the investing public. 9 Under Rule 3.1.17.4 of the 2015 SRC Rules, any offering, solicitation and presentation of securities for sale to the public through information communication technology, such as internet, shall be presumed to be a public offering. 1 investing public.10 Hence, the selling or offering for sale of securities by the respondent RIGEN MARKETING, RIGEN WELLNESS PRODUCT MARKETING, AND ITS ALLIED ENTITIES AND/OR RICO JOHN COLORINES GARCIA11 a.k.a "John Rigen should be immediately restrained to prevent any further grave injury or prejudice to the investing public. Likewise, it is imperative that a Cease and Desist Order be issued as the continued public offering and sale of such securities without the required license from the Commission makes the public offering and selling a continuing illegal act. proprietorship registered with the DTI. The Commission has the authority to issue a sale or purchase of securities, regardless of whether or not the person or entity functions include enforcement and administration of the SRC. Consequently, the power to refrain activities in violation of the SRC is vested with the Commission. investing public from acts that would operate as fraud upon investors or are likely to cause grave or irreparable injury or prejudice to the investing public, and to penalize fraudulent acts, course of business, transactions or practices in connection with the involved is registered with the Commission. RIGEN is under the jurisdiction of the Commission notwithstanding that it is a sole Cease and Desist Order under the circumstances, considering that the Commission's Moreover, the Commission is expressly imposed the duty to protect investors and the As a final word, there is no question that the investment-taking activities of PRODUCT MARKETING, AND ITS ALLIED ENTITIES AND/OR RICO JOHN and/or offering for sale securities in the form of investment contracts or any other COLORINES GARCIA12 a.k.a "John Rigen, their partners, officers, agents, representatives, conduits, assigns and ANY AND ALL PERSONS CLAIMING AND AND DESIST UNDER PAIN OF CONTEMPT, from engaging in activities of selling ACTING FOR AND IN THEIR BEHALF are hereby ordered to IMMEDIATELY CEASE WHEREFORE, premises considered,RIGEN MARKETING,RIGEN WELLNESS forms of the same nature, as discussed above. Furthermore, the subiect entities and individuals are directed to CEASE from immediately the promotional presentation of such investment scheme from the Websites. promoting its investment scheme through the internet and/or delete or remove all business involving the funds in its depository banks, and b) from transferring, under their custody, immediately upon receipt of this Order, until further orders from ensure the preservation of the assets for the benefit of the investors, respondents or any of their representatives, or any person/s acting for and in their behalf, and such representatives, salesmen and agents, are all ENJOINED from a) transacting any and disposing or conveying in any other manner any and all assets, properties, real or have any interest, claim or participation whatsoever, whether directly or indirectly other persons directing or controlling the activities of such corporation, officers personal, and including bank deposits, if any, of which the named persons herein may this Commission. Moreover, to forestall grave damage and prejudice to all concerned and to Commission's Extension Offices having jurisdiction over the area where the principal office of the subject of this Cease and Desist Order is located, are hereby directed to: The Enforcement and Investor Protection Department and/or the 10 In the matter of Boracay Transpacific Properties Inc. & Paradisya Land Inc., SEC CDO Case No. 07-14- 11 https://www.facebook.com/leanELopez/posts/2207043299365559 12 https://www.facebook.com/leanELopez/posts/2207043299365559 01 February 26, 2015. MARKETING, AND ITS ALLIED ENTITIES AND/OR RICO JOHN COLORINES GARCIA13 a.k.a "John Rigen its General.Manager, In-House Counsel or partners; and 2) post copies of the Order at the entrance of the main office and/or branches, if any, of RIGEN MARKETING and RIGEN WELLNESS PRODUCT MARKETING AND ITS ALLIED ENTITIES. (1) serVe this Order to RIGEN MARKETING, RIGEN WELLNESS PRODUCT Registration and Monitoring Department, the Corporate Governance and Finance information and appropriate action. in a national newspaper of general circulation and furnished to the Company Department and the Economic Research and Information Department for their Let a copy of this Order be also posted in the Commission's website, published further directed to submit a formal compliance report, by way of a pleading, to the Commission En Banc within ten (10) days from receipt of this Cease and Desist Order. The EIPD and/or the Extension Office who served and posted this order are 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) In accordance with the provisions of Sec. 64.3 of SRC and Sec. 4-3 of the 2016 FAIL NOT UNDER PENALTY OF LAW SO ORDERED. Pasay City, Philippines, 04 June 2019 EMILI6 B.JAQUINO Chairperson ANTONIETA F. IBE atnwte Commissioner dorobbe EPHYRO LUIS B. AMATONG * Commissioner JAVEY PAUL D. FRANCISCO Commissioner KELVIN LESTER K. LEE Commissioner * On Leave 13 https://www.facebook.com/JeanELopez/posts/2207043299365559 8