BF FOOTBALL/ B&F METROSPORT/ BF FOOTBALL INVESTMENT PLATFORM/ BF FOOTBALL HEDGE FUND INVESTMENT PLATFORM

Securities and Exchange Commission Republic of the Philippines Department of Finance COMMISSION EN BANC IN THE MATTER OF: BF FOOTBALL/B&F METROSPORT/ PLATFORM/BF FOOTBALL HEDGE BF FOOTBALL INVESTMENT FUND INVESTMENT PLATFORM SEC CDO CASE No. 03-22-087 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT, Movant. X CEASE AND DESIST ORDER offer/sell securities is issued; and (b) prohibiting BF Football, its officers,operators,administrators, and Exchange Commission (the "Commission"), and the license to properties, and/or assets, without the prior written authority from the Commission. to as "Agents"), and any and all persons claiming, and/or acting for and in their behalf, to immediately cease and desist, from further engaging in the sale, and/or offer of unregistered securities, and to cease its internet presence relating to its investment activities until the required registration statements are filed with, and approved by the Securities Agents, and any and all persons claiming, and/or acting for and in their behalf, from selling, encumbering, conveying, or disposing any of its Department (EIPD), praying that an order be issued: (a) directing BF Football/B&F Metrosport/BF Football Investment Platform/BF Football Hedge Fund Investment Platform (collectively "BF Football"), its salesmen, agents, investment team planners, mentors, enabiers influencers, assigns, conduit entities, subsidiaries (collectively referred Order (the "Motion"), filed by the Enforcement and Investor Protection This resolves the Motion for Issuance of a Cease and Desist promoters, representatives. PARTIES tasked, among others, to investigate, and to institute administrative The EIPD is one of the Commission's operating departments 1 Filed on 21 March 2022. A THE DOCUMENTS ON RECORD CERTIFIFD FRUE COPYO D D IM I B In the Matter of BF Football. et. al SEC CDO CASE No. 03-22-087 Page 2 of 12 actions against persons, and entities, engaged in the sale, and/or offer of unregistered securities without the requisite secondary license.2 BF Football is an entity that is not registered with the an online-investment solicitation business, and is not authorized to solicit investments from the public, as it has not secured the required Commission, either as a corporation or partnership,3 which operates license from the Commission, as prescribed under Section 8.1 of the Securities Regulation Code (SRC).4 RELEVANT FACTS On the basis of numerous public reports and inquiries,5 filed with the EIPD, relating to the legitimacy of the business operations of BF Football, the EIPD conducted an investigation on the activities, and for possible violations of the SRC, the Revised Corporation Code Commission. operations of BF Football, particularly done on social media platforms (RCC), and other laws, rules, and regulations, implemented by the The investigation revealed that BF Football openly, and publicly, since 2011",7 operating a "reverse betting platform" for football match results, which recommends bets on the scores of actual football games Football promises its investors of a "zero loss" on their investments.: presents itself to be the "world's largest sports investment company where even a wrong bet realizes a profit on the part of the investor. BF probability winning ratio of 17/18 or 96%, with no loss or zero risk. entices the public to make a one time investment, of as low as P500.00. which entitiles the investor to a guaranteed return of investment at the carrying out a legitimate betting operations, it represents to the public that the investment scheme involves actual football games, which gives investors eighteen (18) betting options of 0-0 to 3-3, with a rate of 3% to 5% daily. To convince the public that LMB Footbal is The evidence presented by the EIPD shows that BF Football Hundred Pesos (P500.00) will yield a profit of Five Hundred Forty-Eight Pesos & Seventy Centavos (P548.78), within a period of thirty (30) media account (Facebook), shows that a one-time investment of Five days, computed as follows: BF Football's investment scheme, as published in its social 2 Section 2-2(c)(1-c), Rule II, Part I of the 2016 SEC Rules 4 Annexes "G" to "G-2", Motion. 7 Paragraph 4, Motion. 8 Paragraph 8'of the Motion. 3 Annex "G-3", Motion. Annex "C", Motion. 5 Annex "I", Motion. THE DUONTSONIRECORD CERTFTRD TRUECOPYOT C (OG In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 3 of 12 Day 11 13 14 15 12 10 8 2 3 4 5 6 1 9 N Principal P500.00 P512.50 P525.31 P538.45 P551.91 P565.70 P579.85 P594.34 P609.20 P640.04 P656.04 P672.44 P689.26 P624.43 P706.49 Interest P12.50 P12.81 P13.13 P13.46 P13.80 P14.14 P14.50 P14.86 P15.23 P15.61 P16.00 P16.40 P16.81 P17.23 P17.66 2.5% Total Capital & Interest P512.50 P525.31 P551.91 P579.85 P538.45 P565.70 P594.34 P609.20 P624.43 P640.04 P689.26 P706.49 P724.15 P656.04 P672.44 Net Profit P109.20 P124.43 P140.04 P156.04 P172.44 P189.26 P206.49 P224.15 P12.50 P79.85 P25.31 P38.45 P51.91 P65.70 P94.34 16 30 17 20 21 22 23 24 25 18 19 26 2 28 29 P1,023.20 P839.79 P860.79 P926.97 P998.25 P724.15 P742.25 P760.81 P779.83 P799.33 P819.31 P882.31 P904.36 P950.15 P973.90 P24.96 P19.98 P25.58 P18.10 P18.56 P19.02 P19.50 P20.48 P20.99 P21.52 P22.06 f22.61 P23.17 P23.75 P24.35 P1,048.78 P1,023.20 #839.79 P760.81 P819.31 P950.15 P973.90 P742.25 P799.33 P882.31 P904.36 P998.25 P779.83 P860.79 P926.97 P450.15 P498.25 P523.20 P548.78 P260.81 P382.31 P426.97 P473.90 P242.25 P279.83 P299.33 P319.31 P339.79 P360.79 P404.36 and BF Original Agent Promotion Bonus Rebate. the online posts of BF Football, which were submitted in evidence, investors, gift bonus, VIP Birthday Celebrant Bonus, instant reward, show that investors are also promised a commission of either 10%, 5%, or 3% every time they are able to successfully invite new In addition to the guaranteed monthly return, the screenshots of respective yields,10 as published in its website, and in the social media platforms of its Agents, are as follows: BF Football's monthly and annual investment plans with their SLC OCK 9 Paragraph 9 of the Motion (See Annexes "D" and "H") CERTIFIFD TRUE COPY OI 1o Annex "L", Motion. THE DOCUMENTS ON RECORD FAGE V PA BY In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 4 of 12 Subscription Plan11 10,000 Plan 50,000 Plan 3,000 Plan 5,000 Plan Per Month 51,108 10,222 5,111 3,067 Per Year 582,636 116,527 34,958 58,263 In relation to the process of investing in FB Football, the EIPD submitted in evidence a screenshot of the entity's dashboard which Wit: shows the registration process that an investor must comply with, to A B. Choosing the country: Entering one's preferred account name which may D O be a combination of letters and numbers; Entering the promotional code which can be obtained Entering one's password consisting of six (6) to sixteen (16) digits; E Get the verification code and then proceed to click from the Agent; Entering a mobile number which must be a G-Cash verified number for easier transaction; T G. Wait for the confirmation of one's registration. 'REGISTER"; and The. EIPD submitted evidence showing that BF Football, In support thereof, the EIPD submitted the Certification13 issued by the CRMD, stating that B&F Metrosport is neither registered as a falsified SEC Certificate of Incorporation with number CN201736987.12 corporation or partnership. purportedly operating under the name "B&F Metrosport", used a represented that it has an office at Regus Eco Tower Building, 32nd street, 9th /Avenue, Bonifacio Global" City (BGC)," Taguig "City.14 terminated the lease immediately, and informed the EIPD through an However, for lack of the required proof of registration, the lessor email dated 7 March 2022, that BF Football is no longer using the leased offices. Evidence was also submitted showing that BF football's agents the EIPD presented in evidence the Certifications15 issued by the corporation or partnership, and has no license to sell/offer securities, Corporate Governance and Finance Department (CGFD), and the Company Registration and Monitoring Department (CRMD), the In support of its allegation that BF Football is not a registered 11 For subordinates. 12 Annex "J", Motion 13 Annex "K", Motion. 14 Annex ", Motion 15 Annexes "F" to "F-2", Motion. PAC THE DOEUMENTS ON KECORD CERTIFIED TRUE COPYO SES OG U In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 5 of 12 a corporation or partnership, and has not been issued of any Markets and Securities Regulation Department (MSRD) of the Commission, showing that it has not applied for a primary franchise as secondary license, to operate as a broker/dealer of securities, and is not a registered issuer of any securities, pursuant to Sections 8 and 12 of the SRC, or of mutual funds, including exchange traded funds, membership certificates, and time shares. Amusement and Games Corporation (PAGCOR),16 stating that BF Football has not been issued a license, and/or accreditation, to operate The EIPD likewise obtained a certification from the Philippine as an online sports betting; neither does it have any pending application. During the course of its investigation, the EIPD received a report advantage of the additional incentives. 17 pressure on their subordinates to recruit more investors in order to take that BF Football was able to entice over a hundred people in Bacoor Cavite, through its leaders Gabi Caburnay, Michael Q. Alcaraz a.k.a MB, or Mike Baba, and Kenneth Vista, who were allegedly putting persons soliciting investments, or recruiting investors for and on behalf informing, and warning the public, that BF Football is not authorized to solicit investments, nor to issue securities, as defined under the SRC. as it has not secured the required license from the Commission. The public was also warned that BF Football is not registered, either as a crowdfunding intermediary, or a funding portal. Hence, the public was advised to exercise caution in dealing with individuals, or group of of BF Football. On 20 January 2022, the Commission issued an Advisory,1: solicitation activities. 19 continuously .%operates, Notwithstanding the issuance of the Advisory, BF Football and conducts investment-taking, and Hence, the instant Motion ISSUE Football is warranted based on the findings and evidence presented by the EIPD. Whether the issuance of a cease and desist order against BF 17 Paragraph 14 of the Motion (see Annex "I") 16 Annex "A", Motion. 19 Annex "I" of the Motion. 18 Annex "H", Motion YHE DOUMNTS ON REKOR CERTIFIED TRUE COPY O SEC OGK In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 6 of 12 RULING The Motion is impressed with merit. sufficiently established that BF Football, an entity that is not registered The EIPD's Motion, supported by substantial evidence the form of investment contracts to the public, without the reguired as a corporation, is offering, and/or selling unregistered securities in license from the Commission, in violation of Section 3 of the SRC and Rule 3.1.17 of the SRC-IRR. Section 3 of the SRC defines "securities" as follows: "SEC. 3. Definition of Terms. - and evidenced by a certificate, contract, instrument, whether written or electronic in character. It includes: corporation or in a commercial enterprise or profit-making venture 3.1. "Securities" are shares, participation or interests in a K participation in a profit sharing agreement, certificates of deposit for a future subscription;" (Emphasis supplied) (b) Investment contracts, certificates of interest or An "investment contract" is defined as follows: the money or property of others on the promise of profits. scheme whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others. It is presumed to exist whenever a person seeks to use "An investment contract means a contract, transaction or broker's commission."2o (Emphasis supplied) enterprise, even if the promoter receives nothing more than a more investors A common enterprise is deemed created when two (2) or "pool' their resources, creating a common Exchange Commission,21 the Supreme Court ruled that investment Commission for the protection of the investing public, to wit: contracts are securities that are required to be registered with the In the case of Power Homes Unlimited v. Securities and the SEC cannot protect the investing public from fraudulent securities. The strict regulation of securities is founded on the premise that the capital markets depend on the investing public's ievel of confidence in the system." 8799, it must be registered with public respondent SEC, otherwise "As an investment contract that is security under R.A. No 2 Rule 26.3.5 of the Implementing Rules and Regultions of theSRC. ERTIFITHUE COY O* 21 Note 24, Supra. THE DOCUMENTS ON REYORD SEC Oe PC V t In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 7 of 12 American origin. It traces its roots from the Us Supreme Court transaction, contract, or scheme, whereby a person: (1) makes an investment of money; (2) in a common enterprise; (3) with the Co.,22 where the Court stated that an investment contract is a expectation of profits; (4) to be derived solely from the efforts of others. case Securities andExchange Commission v. W.J. Howey The concept of an investment contract in the Philippines is of Investment contracts have been used, and adopted, in various situations where individuals were led to invest money in a common the efforts of the promoter, or of someone, other than themselves.23 enterprise, with the expectation that they would earn a profit, through Exchange Commission,24 where the Supreme Court ruled that an and used in Power Homes Unlimited Corporation v. Securities and investment contract in our jurisdiction, to be a security subject to The concept of an investment contract was thereafter adopted. regulation by the Commission, must be proved to be: (1) an investment of money; (2) in a common enterprise; (3) with expectation of profits, investor relinquishes control over his or her funds, and submits their (4) primarily from efforts of others. Under this definition, whenever an she is in fact investing in a security.25 control to another, for the purpose of deriving profits from them, he or the form of investment contract, as it has no license to carry out the is unlawfully engaged in the sale, and/or offer for sale of securities in same. Based on the foregoing, the Commission finds that BF Football hundred investors to invest the minimum amount of First, BF Football has already enticed more than P500.00; a to invest by focusing on the financial aspect of the soccer the investors' moneys which is used to pay the guaranteed returns of its existing investors, and intended to ensure the obviously involves the pooling of resources consisting of investment scheme is the only means by which BF Football Second, BF Football's investment scheme allows people game rather than the betting/gambling. This scheme continued operation of the entity. The sale of this 24 G.R. No. 164182, 26 February 2008. 25 Investment Co. Institute v. Camp, 274 F. Supp. 624 (D. D.C. 1967) expected to be solely through the efforts of another party, Rule 26.3 of the 2015 IRR of the SRC present where the individual who placed the money exerted a smal amount of effort in an attempt to earn the profits 22 328 U.S. 293, 66 S. Ct. 1100, 90 L. Ed. 1244, 163 A.L.R. 1043 (1946). 23 ibid. Although the definition replaced the qualifier with "primarily", acknowledging that an investment _contract_may. still be as stated in the Howey Case qualified that the earning of profit was LI CERTIFIED TRUE COPY OY CUMENTSON RECORI PGE As In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 8 of 12 to pay its investors the guaranteed returns; will be able to sustain its operations, and fulfill its promise Third, BF Footbail's investors expect to earn a guaranteed return of their investment in an amount equivalent to 2% to 5% daily, or 60% to 90% monthly; and Fourth, BF Football's investors are not expected to do anything after paying their one-time investment of P500.00. continuity. BF Football even recommends the bets that promotion of BF Football's investment plan, to ensure its It is BF Football and/or agents, who primarily carry out the investors placed on actual football games. Relative thereto, Section 8.1 of the SRC categorically provides that securities cannot be sold, or offered for sale within the Philippines, if the same are not registered with the Commission in the form of an approved Registration Statement, and a Permit to Offer/Sell issued in favor of the applicant, to wit: "SEC. 8. Requirement of Registration Qf Securities. 8.1 Securities shall not be sold or offered for sale or distribution filed with and approved by the Commission. Prior such sale, within the Philippines, without a registration statement duly information on the securities, in such form and with such substance prospective purchaser." (Emphasis and underscoring supplied) as the Commission may prescribe, shall be made available to each that BF Football is unlawfully engaged in the sale, and/or offer of Applying the foregoing to the instant case, this Commission finds has no license to carry out the same, aside from the fact, that it is not unregistered securities in the form of investment contract, because it registered as a corporation with the Commission. BF Football's investment scheme involves public offering of securities, considering that its business operations, and investment-taking activities are published online, through social media platforms, sans the required license. Moreover, the evidence presented by the EIPD also shows that 2015 Implementing Rules and Regulations ("2015 IRR") of the SRC, as follows: Public offering of securities is defined under Rule 3.1.17 of the shall be presumed to be a public offering: or to anyone, whether solicited or unsolicited. Any solicitation or "3.1.17. Public offering is any offering of securities to the public presentation of securities for sale through any of the following-modes SEcOGK X X X THE O GERTIFIED TRUE CPYO UN ON RECORD R G In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 9 of 12 3.1.17.3 Advertisement or announcement in radio, television! communication technology or any communication;"26 (Emphasis supplied) telephone, electronic communications, other information forms of In this case, the evidence clearly shows that BF Football, and its Agents, are using their social media accounts to publicly sell, and/or offer for sale unregistered securities, without the required license from the Commission. This act clearly violates Rule 3.1.17 of the 2015 IRR of the SRC, which further justifies the issuance of a CDO. Finally, relative to the requirements prescribed by law for a valid issuance of a CDO, Section 64 of the SRC provides, thus: Commission, after proper investigation or verification, motul "Section 64. Cease and Desist Order. - 64.1. The prejudice to the investing public." (Emphasis supplied) proprio or upon verified complaint by any aggrieved party, may issue a cease and desist order without the necessity of a prior hearing if in its judgment the act or practice, unless restrained, will operate as a fraud on investors or is otherwise tikely to cause grave or irreparable injury or Under the afore-quoted provision, there are two (2) essential requisites that must be complied with before a cease and desist order can be validly issued: There must be aconduct of a proper investigation or verification; and 2) There must be a finding that the act or practice, unless restrained, will operate as a fraud on investors or is prejudice to the investing public.27 otherwise likely to cause grave or irreparable injury or Anent the first requisite, the records disclose that the EIPD evidence gathered, and submitted in support of its Motion, showing the conducted a proper investigation as evidenced by the Affidavit of the EIPD investigating officer. The EIPD also provided documentary unauthorized investment solicitation activities of BF Football. Football's (as well as its Agents) willful employment of fraud, by making it appear to the public that it is a legitimate corporation authorized to The second requisite is likewise present, as shown by BF sell, offer, and deal with securities. The use of a falsified Certificate of Incorporation, and a registered office address, was intended to defraud 26 Rule 3.1.17 of the Implementing Rules and Regulations of the SRC 154131, July 20, 2006. Securities and Exchange Commission vs. Performance Forelgn Exchange CorpoTatiOn, G.R.Nc OG 3 In the Matter of BF Football, et. ai SEC CDO CASE No. 03-22-087 Page 10 of 12 the public, and make it appear that it is a registered entity, carrying out a legitimate business. In People of the Philippines vs. Mateo, et al.,28 the Supreme Court held that fraud is a generic term that covers any act calculated to deceive, thus: "Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resuiting in damage to another, or by which an undue and unconscientious advantage is taken of another. It is a generic term embracing all multifarious means which human ingenuity can devise, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise. trick, cunning, dissembling and any unfair way by which another is cheated. On the other hand, deceit is the false representation of a matter of fact, whether by words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed which deceives or is intended to deceive another so that he shall act upon it to his legal injury." (Emphasis supplied) Moreover, the act of BF Football in selling/offering unregistered securities, operates as a fraud to the public which, if unrestrained, wil likely cause a grave, or irreparable injury, or prejudice to the investing public.29 This finds support in the case of Securities and Exchange Commission vs. CJH Development Corp.,30 where the Supreme Court emphasized the need for a prompt issuance of a CDO, after a finding of a violation of the SRC, that will likely defraud, or cause a grave, or irreparable injury to the investing public, thus: "The law is clear on the point that a cease and desist order may be issued by the SEC motu proprio, it being unnecessary that it hearing is also not required whenever the Commission finds it results from a verified complaint from an aggrieved party. A prior fraud or grave or irreparable injury to investors. There is good public that the SEC is obliged to protect. appropriate to issue a cease and desist order that aims to curtail reason for this provision, as any delay in the restraint of acts that yield such results can only generate further injury to the The act of selling unregistered securities would necessarily public by making it appear that respondents have authority to Philippines without a registration statement duly filed with and approved by the SEC and that prior to such sale, information on the operate as a fraud on investors as it deceives the investing deal on such securities. Section 8.1 of the SRC clearly states that securities shall not be sold or offered for sale or distribution within the 30 (G.R. No. 210316, November 28, 2016) 28 G.R. No. 210612, October 9, 2017. 29 Section 64 of the Securities Regulation Code. FHE D"UMENTS ON RECORD CERTIF(ED TRUE COPY O) St OGC AGE0 V In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 11 of 12 securities, in such form and with such substance as the SEC may prescribe, shall be made available to each prospective buyer. (Emphasis supplied) On the basis of the foregoing disquisitions, this Commission finds, and so holds, that the issuance of a CDO is warranted and is in order. WHEREFORE, premises considered, directing BF Football/B&F Metrosport/BF Football Investment Platform/BF Football Hedge Fund Investment Platform, and its officers, operators, administrators. promoters, representatives, salesmen, agents, investment team planners, mentors, enablers, influencers, assigns, conduit entities subsidiaries, and any and all persons claiming, acting, and operating for and in their behalf, are hereby ordered to iMMEDiATELY CEASE AND DESIST from engaging in the unlawful/unauthorized solicitation, offer and/or sale of securities in the form of investment contracts, and/or any other similar or related acts, until the required registration statement is duly filed with, and approved by the Commission. Platform/BF Football Hedge Fund Investment Platform, its BF Football/B&F Metrosport/BF Football Investment operators, directors, officers, representatives, salesmen, agents, and any and all persons claiming, and acting for and in their behalf, are likewise directed to immediately CEAsE their internet presence relating to the transactions, and investment scheme, covered by this brokers, dealers, or the tike for and in their behalf Cease and Desist Order. The Commission will institute the appropriate administrative, and criminal action against any persons, or entities, found to act as solicitors, information providers, salesmen, agents, Metrosport/BF Football Investment Platform/BF Football Hedge Fund Investment Platform, its operators, directors, officers, representatives salesmen, agents, and any and all persons claiming, and acting for and Finally, the Commission hereby PROHIBITS BF Football/B&F transferring, disposing, or conveying in any manner, any and all assets. the named persons therein may have interest, claim, or participation, depository banks, and/or in any non-bank financial institution, and from whether directly or indirectly, under their custody, to ensure the in their behalf, from transacting any business involving the funds in its properties, real or personal, including bank deposits, if any, of which preservation of the assets of the investors 2016 Rules of Procedure of the SEC. the posting of this Cease and Desist Order in the Commission's website, and (b) the publication of the same in a newspaper of general circulation, as provided for under Section 4-2, Rule"IV, Part +-of the The EIPD of the Commission is hereby DIRECTED to cause (a) SEX (OCK CERTIF TRRECOPYO THET UAESKON IRECORD 2 In the Matter of BF Football, et. al SEC CDO CASE No. 03-22-087 Page 12 of 12 The EIPD is FURTHER DIRECTED to submit a formal compliance report, by way of pleading, to the Commission En Banc WITHIN TEN (10) DAYS from receipt of this Cease and Desist Order. Let a copy of this Order be furnished to the Company Registration and Monitoring Department, Market and Securities Department, and the Information and Communications Technology Regulation Department, Corporate Governance and Finance Department of this Commission, the Bangko Sentral ng Pilipinas, the Department of Trade and Industry, the National Privacy Commission. the Department of Information and Communications Technology, and the relevant local government unit(s), for their information, and appropriate action. In accordance with the provisions of Section 64.3 of the SRC and Part II, Rule IV; Section 4-3'of the 2016 Rules of Procedure of the] SEC, the Respondent may file a verified Motion to Lift the CDO to the Commission En Banc, thru the Office of the General Counsel, within five (5) days from receipt of this Order. FAIL NOT uNDER PENALTY.OF LAW. SO ORDERED Pasay City, Philippines; 5 April. 2022 EMILIO B!AquINO Chairperson JAVEY PAUL D. FRANCISCO KELVIN LESTER K. LEE Commissioner Commissioner KARLO S Commi$sioner S. BELLO MCJILI BRYANT T. FERNANDE Commissioner SE OGK FHE DOCUMENTS ON CERTIFIED TRUE COPY OI I RECORD PAOE PAGFS By