Black Cell Technology Inc., Black Sands Capital,Inc., Black Cell Technology Limited, and Krops

PICC Secretariat Building, PICC Complex, Pasay City Securities and Exchange Commission Republic of the Philippines Department of Finance In the matter of: BLACK SANDS CAPITAL, INC., BLACK CELL TECHNOLOGY LIMITED, BLACK CELL TECHNOLOGY, INC., ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT, and KROPS Movant. SEC CDO Case No. 01-18-046 CEASE AND DESIST ORDER CELL TECHNOLOGY LIMITED and (4) KROPS, their directors, officers, representatives, 2018 by the Enforcement and Investor Protection Department (EIPD), enjoining (1) BLACK CELL TECHNOLOGY, INC. ("BLACK CELL"), (2) BLACK SANDS CAPITAL, INC., (3) BLACK acting for and in their behalf, to CEASE AND DESIST from engaging in activities of selling and/or offering for sale securities in the form of KROPS Tokens and/or KropCoins, or any others of the same nature, until the requisite registration statement is duly filed with and approved by the Commission and the corresponding license to offer/sell securities is issued. salesmen, agents and any and all persons, conduit, entities and subsidiaries claiming and This resolves the Motion for Issuance of Cease and Desist Orderi filed on 11 January DEPARTMENT (EIPD) alleges the following in its Motion: The. Commission's ENFORCEMENT AND INVESTOR PROTECTION Exchange Commission on August 19, 2015 under Company Registration No. CS2015166962 with principal office address located at #20 Old Road Cut-Cot, Pulilan, Bulacan.3 1 Respondent BLACK cELL is a stock corporation registered with the Securities and 2 As shown in its Articles of Incorporation, the primary purpose of respondent BLACK CELL is as follows: development, computer programming, data communication, microfilming, and "To engage in the business of handling and managing of computer data; data processing, data storage, systems design and analysis, software package related services, like contract programming, consultancy, hardware maintenance, and do any all things necessary and proper in the pursuance of the above objects, without engaging in the telecommunications business."a The names and respective residences and nationalities of the incorporators and original 3 directors of BLACK CELL as appearing in its Articles of Incorporation are as follows:5 2 Annex "A" of Motion - Certificate of Registration of BLACK CELL TECHNOLOGY, INC. 1 Dated 9 January 2018. 3 Annex "B" of Motion- Articles of Incorporation of BLACK CELL TECHNOLOGY, INC. 4 See Annex "B" of Motion d. In re: BLACK CELL TECHNOLOGY, INC., et.al. v. EIPD SEC CDO Case No. 01-18-046 Page 2 of 10 NAMES ADDRESS NATIONALITY 5. Edmund M. Solilapsi 2.Joseph H.Calata 1. Maricar R. Malaki 3. Halmond Parker R. Ong 4. Jose Marie E. Fabella 559 Nueve de Febrero St., Mandaluyong Banga 1st, Plaridel Bulacan Novaliches, Caloocan City 11 illinois St. Cubao, Quezon City City, 1550 Unit 628 Valero Plaza, 124 Valero St., Salcedo VillageMakati City 1060-A Clamor Compound Bagumbong, Filipino Filipino Filipino Filipino Filipino follows:7 BLACK CELL's Directors and Officers as indicated in its GIS as of March 31, 2017 are as NAMES POSITIION 1.Joseph H.Calata 3. Halmond Parker R. Ong 2.Jose Marie E.Fabella 4. Maricar R. Malaki 6. Rose Ann P. Gonzaga 5.Edmund M.Solilapsi 7. Avan G. Pabilando Director/Incorporator Chairman/President/Director/ Incorporator Corporate Secretary/Director/Incorporator Treasurer/Director/Incorporator Assistant Corporate Secretary Director/Incorporator Chief Financial Officer 5 Based on information published online on its website, the following are members of the so- called KROPS Team: NAMES DESIGNATION 4. Richard Kennedy Domingo 1. Joseph H. Calata 2. Chie Malaki 3.Barty Espino IV Business Growth Executive Founder Global Expansion Sales Director Chief Technology Officer 6. BLACK SANDS CAPITAL INC.,* is a stock corporation registered with the Commission under Company Registration No. CS201516697. BLACK CELL TECHNOLOGY, INC. is a subsidiary of BLACK SANDS residences of the incorporators and first directors of said Corporation are as follows:11 CAPITAL, INC. which is listed as a majority stockholder holding 95% of its outstanding capital stock.10 Its principal office address is at # 20 Old Road, Cut Cot, Pulilan, Bulacan. The names, nationalities and NAMES ADDRESS NATIONALITY 1. Joseph H. Calata 2. Halmond Parker R. Ong Unit 628 Valero Plaza, 124 Valero St. Banga 1st,Plaridel Bulacan Filipino Filipino being a Director or Officer of any listed company. PSE Decision dated 3 December 2017. He is the Chairman, President, and CEO of Calata Corporation, which was delisited from the Philippine Stock The same Joseph H. Calata was permanently disqualified by the Philippine Stock Exchange from Exchange for non-disclosure of material information. See page 31 of the BLACK CELL White Paper Annex "H" of Motion. 7 Annex "C" of Motion GIS of BLACK CELL as of March 31, 2017. Annex "D" of Motion - Certificate of Incorporation of BLACK SANDS CAPITAL, INC. 10 See page 4 of BLACK CELL's GIS. 11 Annex "D-1" of Motion - Articles of (ncorporation of BLACK SANDS CAPITAL, INC. In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No. 01-18-046 Page 3 of 10 4. Edmund M. Solilapsi 3. Jose Marie E. Fabella 5. Jaime G. Manzano 1060-A Clamor Compound Bagumbong, Novaliches, Caloocan City 1073 Clamor Compound, Bagumbong, Novaliches, Caloocan City 11 Illinois St., Cubao, Quezon City Filipino Filipino Filipino through computers and mobile phones and other similar gadgets through the worldwide web or INC. operates a website at https://www.mykrops.com/ as identified by DigiCert, Inc. as shown in the printed copy of the screenshot attached hereto as Annex "E".12 EIPD downloaded and printed the pages found on the site advertising and describing the business of KROPS and publicly offering [KROPS'] tokenized shares.13 The website is widely and publicly accessible online in the Philippines more popularly known as the internet. 7. After due verification and investigation, the EIPD found that BLACK CELL TECHNOLOGY 8. The BLACK CELL website boldly presents on its homepage14 what it claims to be "the World's First Agriculture Marketplace Crypto Equity ICo" 15 It also announces that "Pre-Sale is now Live! 1.00 USD LESS 30% DISCOUNT! PRE-SALE TOKEN PRICE: 0.00105 ETH ($0.70 USD/token)"16. It then makes the following disclosure: "2,347,985.225461 tokens sold out of 6,400,000 pre-sale tokens"17 limited to lost profits, loss of revenue, third party loss whether foreseeable or otherwise, trading is a printed downloaded copy of the "White Paper" as appearing online which is accessible through a the outset makes a legal disclaimer stating that Black Cell Technology Limited and KROPS and their respective officers, employees or agents shall not be liable for damages that may include but are not losses or damages that result from use or loss of the Krops tokens."18 Attached hereto as Annex "H" link labelled White Paper on the homepage of the Black Cell website as described above which when clicked leads to the page containing the said White Paper. 9. BLACK CELL TECHNOLOGY INC. published through said website a "White Paper" that at company, a mobile application owned by Black Cell Technology Limited, which it refers to as a company incorporated and registered under Companies Registry of Hongkong Special Administrative Region with registration number 2475885.19 10. The White Paper makes reference to KROPS which is described therein as a startup company, is founded by a young Filipino businessman and agriculture expert Joseph H. Calata marketplace for agricultural products that connects buyers to sellers that are within close describing it as "the largest agricultural hub that brings you the future of global agriculture, a proximity" 20 11. Black Cell Technology Limited states in its White Paper that KROPS, as a startup trailblazing agricultural hub that brings together sellers and buyers of the Philippines' agricultural products and eventually and potentially that of the whole world, is offering its tokenized shares].21 12. Black Cell Technology Limited likewise [represents] in its White Paper that [KROPS, a that there is no market that exists for KROPS tokens also referred to as KropCoins.22 An ICO or initial coin offering is an unregulated means by which funds are raised for a new cryptocurrency venture. An Ico is designed to bypass rigorous and regulated capital-raising processes required by venture 13. Black Cell Technology Limited [represents] that this is an initial coin offering (ICO) and 17 Annex "G-3" of Motion 12 Annex "E" of Motion Screenshot of a page on the website identified by a digital certificate issued by DigiCert as Black Cll 13 Annex "F" of Motion -Affidavit of Atty. E. Valle of the Investigation and Prosecution Division of EIPD. 18 See page 4 of the White Paper - Annex "H" of Motion 21 Id. at 6 22 Id. at 13 Technology, Inc 14 Annex "G" of Motion - Screenshot of BLACK CELL homepage 15 Annex "G-1" of Motion 16 Annex "G-2" of Motion 19 (d. at 7 20d In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No. 01-18-046 Page 4 of 10 of the project in exchange for legal tender or other cryptocurrencies, often Bitcoin or Ethereum.23 capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers establishment of a technology based agricultural marketplace which Black Cell Technology Limited intends to put up and which will make use of KropCoins as medium of exchange. 14. Apparently, the value of KropCoins is sought to be generated or driven through the value of its transactions it can capture on its marketplace. This will be highly dependent on the extent to which it can establish the active user base and promote repeat transactions.2 15. The White Paper [states] that KROPS' primary value driver is its market share or the company seeks to establish, Black Cell Technology Limited undertakes to redeem tokens in exchange for its own equity shares]. 16. Apart from offering tokenized shares in [KROPS, the technology based business that the application and startup company, it nonetheless claims in its White Paper that KROPS was founded by Mr. Joseph Calata himself.25 17. Black Cell Technology Limited] is being claimed to be the owner of KROPS as a mobile use of cryptocurrency and the use of currently available technology used in the storage, sending and receipt of cryptocurrency through the creation of what is known as an Ether wallet. Ether wallet is TECHNOLOGY INC. website as described above. currently available online technology that functions as an online wallet for Ether tokens. Ether coins (ETH) can be bought online in US dollars from such exchanges as Coinbase using either a credit card or a bank account. The link describing the process of buying KropCoins is found in the BLACK CELL 18. In order to be able to buy KROPS tokens, [Black Cell Technology Limited] requires the allegations contained in the motion and the evidence presented. The foregoing considered, we now resolve the case on the merits based on the The Motion is impressed with merit. BLACK SANDS CAPITAL, INC., (3) BLACK CELL TECHNOLOGY LIMITED, and (4) KROPS are selling or offering securities in the form of KROPS Tokens and/or KropCoins, to the public, in the Philippines, without the necessary license from the Commission. There is substantial evidence that (1) BLACK CELL TECHNOLOGY, INC., (2) KROP TOKENS AND/OR KROPCOINS ARE SECURITIES Securities are defined in Section 3.1 of the SRC, viz: 3.1 "Securities are shares, participation or interests in a whether written or electronic in character. Section 3. Definition of terms. corporation or in a commercial enterprise or profit making venture and evidenced by a certificate, contract, instrument, the Commission by the legislature to address future contingencies and circumstances, Furthermore, Section 3.1(g) of the SRC contains reserved power conferred upon 23 https://en.wikipedia.org/wiki/Cryptocurrency 24 See Annex "H" (White Paper), page 32 2$d. at 7 In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No.01-18-046 Page 5 of 10 considering that the securities space is a fast evolving sphere and scammers are becoming more and more sophisticated and elaborate in their nefarious schemes, viz: Other instruments as may in the future be determined by the Commission in a profit-making venture (KROPS), evidenced by instruments in electronic form Here, the securities are the KROPS Tokens and/or KropCoins, which are interests the Howey Test as laid down in the case of Power Homes Unlimited Corporation v. SEC,26 Viz: Moreover, the KROPS Tokens and/or KropCoins satisfy the four (4) elements of (1 Investment of Money - at US$0.70/token Pre-Sale Price (at 30% discount from the regular price of US$1.00/token). "Money" in the Howey Test refers to any valuable Respondents claim that the KROPS Tokens and/or KropCoins are being sold Organization (DAO) Report of the U.S. SEC dated July 25, 2017. consideration, as was highlighted in the Decentralized Autonomous (2 Common Enterprise -- Respondents state that KROPS as a technology-based "startup company" described as "a trailblazing agricultural hub that brings together sellers and potentially that of the whole world." The so-called "company" is not a profit-making venture. It is evident from the alleged "2,347,985.225461 tokens sold" that there are multiple investors. buyers of the Philippines' agricultural products and eventually and registered corporation. Rather, it may be treated as an unincorporated ((3 Expectation of Profit Respondents claim that "KROPS' primary value driver is its market share or the value of its transactions it can capture on its marketplace. This will be highly dependent on the extent to which it can establish the active user base and promote repeat transactions." Investors are led to expect that their investment in KROPS Tokens and/or KropCoins will appreciate. (4 Primarily from the Efforts of Others agricultural marketplace, e.g. as buyer or seller. The increase in value of the KROPS Tokens and/or KropCoins, and even the KROPS profit-making venture as a whole, does not depend primarily on the efforts of the investor. Investors need not participate in the envisioned Incidentally, the Supreme Court has stated that: the United States, decisions of United States courts [I]n case of laws patterned after or adopted from those of construing similar laws are entitled to great weight.27 determine that an Initial Coin Offering (ICO)28 was an offering of securities,29 viz: various investment contracts are securities--was recently used by the U.S. SEC to In this light, the Howey Test--which has been used extensively to identify whether 26 G.R. No. 164182, 26 February 2008. 27 Rafael A. Morales, The Philippine Securities Regulation Code Annotated (2005), p. 356 (citing CAROLINA INDUSTRIES, INC. vs. CMS STOCK BROKERAGE, INC., G.R. No. L-46908, May 17, 1980) 28 As defined by INVESTOPEDIA: "Initial Coin Offering (ICO) - an unregulated means by which funds are raised for a new cryptocurrency venture. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No. 01-18-046 Page 6 of 10 Determining whether a transaction involves a security does not turn on labelling xxx but instead requires an assessment of "the economic realities underlying a transaction."3o Securities Commissions (I0SCO). In 18 January 2018, I0SCO released a Policy Statement that ICO's raise "investor protection concerns," viz: regard to ICOs due to its obligations as a member of the International Organization of It bears mentioning that the Commission is duty-bound to exercise caution with Initial Coin Offerings (ICOs, also known as token sales or coin sales). typically involve the creation of digital tokens - using distributed subscription, in return for a crypto-currency such as Bitcoin or Ether (or more rarely for government-backed or official fiat currency (such as the US Dollar or the Euro). These offerings are not standardized, and their legal and regulatory status is likely to depend on the ledger technology -- and their sale to investors by auction or through circumstances of the individual icO. There are clear risks associated with these offerings. ICOs are highly- speculative investments in which investors are putting their entire invested capital at risk. While some operators are providing legitimate targeting of IcOs to retail investors through online distribution jurisdiction--which may not be subject to regulation or may be investment opportunities to fund projects or businesses, the increased protection concerns. There have also been instances of fraud, and as a result, investors are reminded to be very careful in deciding whether channels by parties often located outside an investor's home operating illegally in violation of existing laws--raises investor to invest in Icos. and/or KropCoins (representing interest in KROPS), in exchange for a crypto-currency, Ether. As noted by IOSCO, these are highly speculative. As part of IOSCO, however, the Commission is duty-bound to do what is necessary to protect the investing public. Similarly, what is involved here is a sale to the public of digital KROPS Tokens securities. A public offering of securities is subject to strict disclosure rules, which includes the disclosure of pending cases against the founder/offeror/promoter, which would put this duty in the case of KROPS. On that note, the investing public should be wary of an ICQ where the issuer has pending criminal and administrative cases, e.g. for violation of disclosure rules imposed by the Commission. the investing public on guard. The Commission, mandated to protect investors must fulfill What is involved here is an ICO, which is essentially the same as a public offering of the Howey Test, are clearly "securities" within the regulatory power of the Commission. Therefore, the KROPS Tokens and/or KropCoins, under both Section 3.1 SRC and BLACK CELL, ET. AL. ARE OFFERING SECURITIES FOR SALE without a Registration Statement duly filed with and approved by the Commission pursuant to Sections 8 and 12 of the Securities Regulation Code (SRC). As a general rule, securities cannot be sold or offered for sale within the Philippines The registration of securities is provided in Section 8.1 of the SRC, viz: 29 See In the matter of Munchee Inc. Administrative Proceeding of the U.S. Securities and Exchange https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp Commission, December 11, 2017. the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies." 30 In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No.01-18-046 Page 7 of 10 8.1 Securities shall not be sold or offered for sale or shall be made available to each prospective purchaser. and with such substance as the Commission may prescribe, Sec. 8. Requirement of Registration of Securities. - distribution within the Philippines, without a registration statement duly filed with and approved by the Commission. Prior to such sale, information on the securities, in such form the SRC defines "Public Offering" as: In this regard, Rule 3.1.17 of the 2015 Implementing Rules and Regulations of [A]ny offering of securities to the public or to anyone, whether solicited or unsolicited. Any solicitation or presentation of securities for sale through any of the following modes shall be presumed to be a public offering: 1. Publication in any newspaper, magazine or printed reading material which is distributed within the Philippines; 2. Presentation in any public or commercial place; 3. Advertisement or announcement on radio, television, telephone, communication communication; or electroni technology communications, orotherforms information of 4. Distribution and/or making available flyers, brochures or to prospective purchasers through the postal system, information communication technology and other means any offering material in a public or commercial place or of information distribution. website at https://www.mykrops.com/. This constitutes a public offering as defined Sections 8 and 12 of the SRC before being offered or sold to the public. under SRC Rule 3.1.17, and is subject to the strict registration requirements under Here, BLACK CELL is offering for sale the KROPS Token and/or KropCoins via its Token and/or KropCoins at a pre-sale price of 1 USD less a 30% discount or a pre-sale token already sold of the 6,400,000 tokens being offered to the public. price of 0.00105 ETH (Ether) (US$0.70/token) with more than 2 million pre-sale tokens On its website, BLACK CELL also states that there is an ongoing pre-sale of KROPS Securities Regulation Department (MSRD),31 Corporate Governance and Finance licensed to employ brokers, dealers, salesmen, or associated person. Department (CGFD)32 and Company Registration and Monitoring Departments (CRMD)33 stating that BLACK CELL does not possess the requisite secondary license to sell or offer to sell securities to the public. The CRMD further certifies34 that BLACK CELL is not In January 2018, certifications were issued by the Commission's Markets and KROPS website is accessible in the Philippines; (2) the KROPS officers, whose photos are on the As to whether the sale is "in the Philippines," there are several telling facts: (1) the 33 Annex "K" of Motion 31 Annex "I" of Motion 32 Annex " of Motion 34 d In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No. 01-18-046 Page 8 of 10 SAND are domestic corporations; (4) KROPS' website domain was applied for by a Filipino, the selling efforts are being performed by agents--including "information providers"--with addresses in the Philippines. website, are mostly Filipinos with addresses in the Philippines; (3) BLACK CELL and BLACK domiciled in the Philippines, who represented herself as an officer of KROPS; (5) the KROPS addresses and telephone numbers listed in the website are based in the Philippines; and (6) and information, that instead of stocks he would offer crypto-currency instead to his shareholders: and majority, if not all, of the shareholders of Calata Corporation are Filipinos, residing in the Corporation's delisiting from the Philippine Stock Exchange for non-disclosure of material Philippines. Most telling of all, Joseph H. Calata35 publicly announced,36 on the occasion of Calata the BLACK CELL website is in violation of Sections 8 and 12 of the SRC. Therefore, the unregistered public offering of KROPS Token and/or KropCoins on LIABILITY OF PARTICIPANTS IN THE OFFER OR SALE Supreme Court held that even "information providers" may be held liable for "solicitation" in relation to the selling or offering for sale of unregistered securities, viz: In the case of Securities and Exchange Commission vs. Oudine Santos,37 the Solicitation is the act of seeking or asking for business or information; it is not a commitment to an agreement. Santos, by the very nature of her function as what she now Securities made by PIPC Corporation and/or PIPC-BVI to certain individuals, specifically private complainants Sy and Lorenzo by Corporation and/or PIPC- BVI with the end in view of PIPC Corporation unaffectedly calls an information provider, brought about the sale of providinginformation closing a sale. on the investment products of PIPC While Santos was not a signatory to the contracts on Sy's or Lorenzo's investments, Santos procured the sale of these unregistered securities investment products being offered for sale by PIPC Corporation and/or to the two (2) complainants by providing information on the PIPC-BVI and convincing them to invest therein. No matter Santos' strenuous objections, it .is apparent that she thereon, even if not shown strictly on paper, was prima facie Corporation and/or PIPC-BVI, acting as an ostensible agent of the Iatter on the viability of PIPC Corporation as an investment company. At each point of Sy's and Lorenzo's investment, Santos' participation established.38 connected the probable investors, Sy and Lorenzo, to PIPC INC., (2) BLACK CELL TECHNOLOGY LIMITED, (3) BLACK SANDS CAPITAL, INC., and (4) KROPS in the unregistered public offering and sale of KROPS Tokens or KropCoins. This ruling applies to the present or future agents of (1) BLACK CELL TECHNOLOGY 37 G.R. No. 195542, March 19, 2014. 35 Permanently disqualified by the Philippine Stock Exchange from being a Director or Officer of any listed company, PSE Decision dated 3 December 2017. exchange-amid-reports-of-pse-delisting 38 Id. http://news.abs-cbn.com/business/10/30/17/calata-plans-to-take-firm-to-cryptocurrency- In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No. 01-18-046 Page 9 of 10 in violation of Section 28.1 of the SRC, which clearly provides that "no person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as salesmen, or an associated person or any broker or dealer unless registered to act as such with the Commission." Neither can respondents engage a broker, dealer, salesman, or associated person, CDO IS URGENT AND MAY BE ISSUED EX PARTE without necessity of a prior hearing if it, viz: Section 64.1 of the SRC provides that the Cease and Desist Order may be issued SEC. 64. Cease and Desist Order. 64.1. The Commission, after proper investigation or verification, motu propio, or upon verified complaint by any aggrieved party, may issue a cease and desist order without necessity of a prior hearing if in its judgment the act or irreparable injury or prejudice to the investing public. practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave O Commission before being offered or sold to the public in order to protect the investing irreparable damage and injury to the investors and the public in general. public from worthless securities, which, if unchecked, is likely to cause grave and The SRC is explicit that, as a general rule, securities should be registered with the Order be immediately issued. without the required license from the Commission makes the public offering and selling a continuing illegal act which makes it imperative and necessary that a Cease and Desist The continued public offering and sale of the KROPS Tokens and/or KropCoins BLACK SANDS CAPITAL, INC., (3) BLACK CELL TECHNOLOGY LIMITED, and (4) KROPS their partners, officers, directors, agents, rep IMMEDIATELY CEASE AND DESIST,39 UNDER PAIN OF CONTEMPT,from engaging in KropCoins or any others of the same nature as discussed in this Order, until the requisite ALL PERSONS CLAIMING AND ACTING FOR AND IN THEIR BEHALF are hereby 0rdered to activities of selling and/or offering for sale securities in the form of KROPS Tokens and/or registration statement is duly filed with and approved by the Commission and the corresponding to offer/sell is issued. WHEREFORE, premises considered, (1) BLACK CELL TECHNOLOGY, INC., (2) presentatives, conduits, assigns, AND ANY AND investment activities Respondents are directed to cease its internet presence relating to above-stated agents, brokers, dealers or the like for and in behalf of the subject corporations. against any persons or entities found to act as solicitors, information providers, salesmen, The Commission will institute the appropriate administrative and criminal action The EIPD is hereby DIRECTED to: SANDS CAPITAL, INC., (3) BLACK CELL TECHNOLOGY LIMITED, and (4) [A] Serve this Order to (1) BLACK CELL TECHNOLOGY,INC.,(2) BLACK hearing if in its judgment the act or practice, unless restrained, will operate as fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public. 39 Section 64.1 of the SRC - The Commission, after proper investigation or verification, motu propio, or upon verified complaint by any aggrieved party, may y issue a cease and desist order without the necessity of a prior In re: BLACK CELL TECHNOLOGY, INC., et. al. v. EIPD SEC CDO Case No.01-18-046 Page 10 of 10 KROPS, their President, General Manager, Corporate Secretary, Treasurer, In-House Counsel or partners; and CAPITAL, INC., (3) BLACK CELL TECHNOLOGY LIMITED, and (4) KROPS. [B] Post copies of the Order at the entrance of the main office and/or branches, if any,of (1) BLACK CELL TECHNOLOGY,INC.,(2) BLACK SANDS Banc within five (5) days from receipt of this Cease and Desist Order. The EIPD is further directed to submit a Compliance Report to the Commission En the 2016 Rules of Procedure of the Commission, the respondents may file a Motion to Lift the CDQ within five (5) days from receipt of this Cease and Desist Order. In accordance with the provisions of Section 64.340 of the SRC and Section 4-3 of newspaper of general circulation, copy furnished the CRMD and the Information and Communication Technology Department (ICTD) for appropriate action. Let a copy of this Order be published on the Commission's website, also in a FAIL NOT UNDER PENALTY OF LAW. SO ORDERED Pasay City, Philippines; 23 January 2018 TERESITA J. HERBOSA Chairperson mtmxo Motn ANTONIETA F. IBE Commissioner EPHYRO LUIS B. AMATONG Commissioner BLASJAMES G.NITERB6 Commissioner anle A CY EMILIO'BIAQUINO Commissioner Wex days from receipt of the order, file a formal request for a lifting thereof. Said request shall be set for hearing by the Commission not later than fifteen (15) days from its filing and the resolution thereof shall be made not later time herein prescribed, the cease and desist order shall automatically be lifted. 40 Section 64.3 of the SRC - Any person against whom a cease and desist order was issued may, within five (5) than ten (10) days from the termination of the hearing. If the Commission fails to resolve the request within the