Caceres Lending Investor Co.

CACERES LENDING INVESTOR CO. GLOBAL MONEY UNLIMITED, ECC-LIVELIHOOD SOCIAL SERVICES, INC. Page 6 of 6 ENFORCEMENT AND PROSECUTION DEPARTMENT EC-CDO Case No. 04-12-003 Contracts without the proper registration in violation of the Securities Regulation Code.24 Commission that they are engaged in the sale of securities in the form.of investment Lastly, it may be noted that the respondents did not refute the findings of the and acting for and in behaf and under its authority is hereby.MADE PERMANENT. UNLIMITED and ECC-LIVELIHOOD SOCIAL SERVICES, INC, its .partners,officers, directors, agents, representatives, conduits, assigns, and any and all persons ciaiming fied.by respondents CACERES LENDING INVESTOR CO. GLOBAL MONEY UNLIMITED DESIST ORDER issued against CACERES LENDING INVESTOR CO., GLOBAL MONEY and ECC-LIVELIHOOD SOCIAL SERVICES, INC is hereby DENIED and the CEASE ANDl WHEREFORE, premises considered;, the Motion to Lift Cease and Desist Order Furthermore, let this Order be published in a national newspaper of general circulation. serve this Order on the respondents or any of its. authorized representatives; (b). post copies of the Order at the entrance of the main office and/or branches, if any, of the respondents. Let a copy of this Order be also posted"in the Commission's website. The Enforcement and Prosecution :Department is hereby. DIRECTED to:(a) the :Economic Research and Information. Department for their information and appropriate action. Let copies. of this Order be furnished the Corporation Finance Department and FAIL NOT UNDER PENALTY OF LAW. SO.ORDERED. Mandaluyong City; 21 June 2012. TERESITA J. HERBOSA Chairperson MA. JUANItA e: CUetO* RAUL J.. PALABRICA Commissioner Commissioner MANUEL HUBORTO B. GAITE ELADIO M.JALA Commissioner domai missioner 24 Cease and Desist Order, pp. 4-5. fon sick ieave SEC-CDO Case No. 04-12-003 CACERES LENDING INVESTOR CO. GLOBAL MONEY UNLIMITED, ECC-LIVELIHOOD SOCIAL SERVICES, INC. ENFORCEMENT AND PROSECUTION DEPARTMENT Page 5 of 6 a company should receive profits or interests based on foans made to the borrowers in 94742o there is no mention of the phrase "receiving profits or.certain percentage of order to be classified as a lending company: Nevertheless, based on the facts and profit or percentage in. return. Ciearly, as can be gleaned from the provision of RA while receiving. profits or a certain percentage of the money it loaned to its borrowers. The respondents claimed that CACERES loaned out money to its members without any money it foaned to borrowers". Moreover, there is no requirement under RA 9474 that : evidence gathered consisting 'of marketing plans, flyers, the purpose stated in its Articies of Partnership, the statements made by Mr.-Caceres and.by some of the expired registration with the.Commission: members/investors, CACERES is: clearly engaged in lending money for profit using an conduct business unless granted an authority to'operate by the. Commission." money.under RA 9474 is inciuded in the license to operate. granted to.CACERES.21 The primary license to operate as .a lending.company :as. provided in its Articles of argument is baseless since Sec. 4, RA 9474 mandates that no lending company shall Partnership was granted by the Commission, it presupposes.that the matter of lending The' respondents further claim, in the same Motion to Lift CDO, that since a The rather from the required CA issued by the Commission.23 authority granted by the Commission .is not derived from its Articles of: Partnership but operate as a corporation, not as a partnership. The business of lending money can no the Articles of Partnership had already expired on 14 June .2009. CACERES has not this case, CACERES was registered with the Commission. as a partnership. . To reiterate even attempted to establish nor has been established as a corporation thereafter Ionger be carried on under a partnership but must be done through a corporation: In Moreover; .Sec. 4,::RA 9474 further provides that a lending company must .20 Section 3(a) of Republic Act No. 9474 defines a LENDING COMPANY as a corporation engaged in 21-Motion to Lit CDO dated 28 May. 2012, pp: 2-3. 22 SECTION 4.*Form of Organization. - 23 Rule 3a(i). of the (mplementing Rules and Regulations of RA 9474. : disallowed from engaging in the business of granting ioans to the public one year after the. date of effectivity of this Act. No lending company shail conduct business unless granted an authority to operate by the SEC. Provided, That existing tending investors organized as single proprietorships or partnerships shall be nineteen (19) persons. It shall not be deemed to include bainking institutions; investment houses, and other credit institutions already regulated by iaw. The term shall be synonymous with iending granting loans from its own capital funds or from funds sourced from not. more than savings and loans associations, financing companies, pawnshops, insurance companies, cooperatives investors. -A jending company shall be established only as a corporation: CACERES LENDING INVESTOR CO. GLOBAL MONEY UNLIMITED, ECC-LIVELIHOOD SOCIAL SERVICES, INC ENFORCEMENT AND PROSECUTION DEPARTMENT Page 4 of 6 9EC-CDO Case No. 04-12-003 grave or irreparable injury or prejudice to the investing public. A verified complaint filed proprio, may issue a CDO, if in the judgment of the Commission, the act or practice, proprio, a CDO is that the EPD must conduct a proper investigation or verification. Once an investigation or verification by the EPD is conducted, the Commission, motu unless restrained, will operate as a fraud on investors or is otherwise iikely to cause CDO. by any aggrieved party is not the only manner by which the Commission may issue a In the instant case, the respondents were not denied due process by the non- motu proprio upon a prior investigation or verification by the EPD, or upon a verified a verified complaint need not be furnished and served:upon the respondents as argued by them since a CDO may be issued motu proprio by the Commission. them in their: Motioni to Lift CDO. The Rules explicitly state that.a CDO may be issued complaint. The CDO was issued motu proprio by the Commission En Banc on 17. May 2012 after a prior investigation conducted by EPD in accordance'with the Rules. Thus. filing of a formal complaint or verified compliant by any aggrieved party as argued by EPD conducted a thorough investigation"prior to the issuance of the CDO:when: (1) operations involving CACERES' lending and investment-taking activities;16. (2) Edmundo Field Investigation Report assertion that the issuance was merely based from a letter.15 The records reveal that the: major components of the Marketing PIan of. CACERES and GLOBAL MONEY that are substantially the same with what investigation and verification conducted by the EPD .contrary. to the respondents! numerous : informants/complainants Caceres Jr., on his own volition, eve Moreover, the .issuance' of the cDO is.valid since:it was based on a prior nrer :provided. details. .to. theEPD :of the: entities provided by the informants/complaints;17. (3) a the : EPD :stated that .ECC has assumed. the red before the Commission and expiained of the Motion for Issuance of a Cease and Desist Order.dated 10 April 2012, prior to the Genealogy Chart, ECC Membership Forms and ECC ID Form.19..Clearly; investigation issuance by the Commission of the CDO as mandated by the Rules. attended a businessseminar and were handed a CACERES brochure, ECC Recruitment contrary to its. purpose and verification were conducted by the EPD leading to the consequent filing by the EPD unauthorized lending and investr non-profit ent-taking business:of CACERES and GLOBAL MONEY itcorporation;18.and 4) EPD Investigators In the same Motion to Lift CDO, the respondents claim that they cannot be considered a lending company and not covered under RA 9474 because it is understood that under its provisions a lending company is one that is engaged in lending activitiesl 16 Cease and Desist Order, pp. 4-5. 19 Idp. 7. 15 Motion to Lift CDO dated 28 May 2012, p. 1. 17 Id., pp. 5-6. 18 Id., Pp. 6-7. CACERES LENDING INVESTOR CO. GLOBAL MONEY UNLIMITED, ECC-LIVELIHOOD SOCIAL SERVICES, INCJ ENFORCEMENT AND PROSECUTION DEPARTMENT Page 3 of 6 -C e No. 04-12-003 brochure, ECC Recruitment Genealogy Chart, ECC Membership Forms and ECC. ID Form. 10 A Cease and Desist Order dated 17 May 2012 was issued by the Commission Er Banc against the respondents for engaging in the' unauthorized business of lending registration. 11 unauthorized business of seiling securities to the :public without the proper money to the public without being established as a corporatiori and for engaging in the On 05 June 2012, the Commission received the respondents' Motion to Lift CD0 was merely based from a letter sent by a certain person named Edwin, and. not. substantiated by any other evidence to uphold its legality. They claim that the issuance Motion to Lift CDO, the respondents: argue. that .the CDO is .not supported-or dated 28 May 2012 praying that the CDO dated 17 May 2012 be lifted.12 In their :conducted by the EPD. Thus, they. claim that they were placed at: a lost because they formal copy of the complaint. but only mere invitations to appear in the investigations cannot answer to the charges levied upon them and, as a result, they were denied due necessarily a formal complaint. Furthermore, they argue that they were not furnished a process. 13 'states the following: Exchange Commission (Rules), in providing the requirements for the issuance of a CDO, Section. 10-2, Rule X of the 2006 Rules :of Procedure of the Securities. and verified complaint, may issue a CDO without the necessity of a prior hearing if in investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public: x x'x" its judgment the act or practice, unless restrained, will operate as a fraud on proper investigation or verification by CED (now.EPD), motu proprio, or upon "Sec. 10-2. Issuance of a CDO. --The Commission, through. the OGC, after requirement that must be complied with by the Commission before it may issue, motu proprio or upon verified complaint14 :Under the above provision, the Commission :may issue a CDO either motu . without a prior hearing. The essentia! 12 Motion to Lift CDO dated 28 May 2012, p. 5. 11 In violation of Sec. 4, RA 9474 and Sec. 8 of.RA 8799 (The Securities Regulation Code), respectiveiy. i4 Section 10-2, Rule X of the 2006 Rules provides that a verified complaint may be filed by the aggrieved 10 Id., p. 7. 13 Id., pp. 1-2. party with the Commission, through the CED (now EPD), for the issuance of a CDO pursuant to the provisions of Section 64 of the SRC. CACERES LENDING INVESTOR CO. GLOBAL MONEY UNLIMITED, ECC-LIVELIHOOD SOCIAL SERVICES, INC. ENFORCEMENT AND PROSECUTION DEPARTMENT Page 2 of 6 -CDO Case No. 04-12-003 Lending Company (CA) as required by R.A: 9474, otherwise known as the Lending Company Regulation Act of 2007.3 Its registration had expired on 14 June 2009.4 with the Commission on 16 March 2012.7 business under the umbrelia of CACERES. . On the other hand, ECC-LIVELIHOOD SOCIAL SERVICES, INC. (ECC) is a non-stock, non-profit corporation duly registered Commission.5 However, GLOBAL MONEY is.part .and.parcel of CACERES.and is doing GLOBAL MONEY UNLIMITED (GLOBAL MONEY) is not registered with the public not to enter into any lending or other transactions with CACERES and GLOBAL MONEY since it has not been issued a CA.: J. Herbosa' was sent by a concerned citizen named Edwin informing the Chairperson of the lending and investment-taking activities of CACERES and GLOBAL MONEY. On 08 March 2012, an Advisory was posted on the website of the Commission advising the EPD claims that on. 1 February 2012, a letter addressed. to Chairperson Teresita are substantially the same as that provided by the informants/complainants. was the Partner of CACERES and is the President: of ECC, appeared before "the Commission and explained the componients of the CACERES and GLOBAL MONEY which interest-free ioans to members. On 9 and 12 March 2012, Edmundo. Caceres Jr., who of new members, the -scheme to receive unlimited income and the availability of provided details of the entities' operation such as the membership fees, the. recruitment Thereafter, numerous informants/complainants appeared: before the EPD and conducting surveilfance by attending the business seminar and were handed a CACERES Investigators confirmed that ECC is.engaged in the same business as CACERES after assumed the :unauthorized lending and investment-taking business "of CACERES and to evade the controversy caused by the posting of the Advisory. This was confirmed in EPD's Field Investigation Report.: It was further stated in the said Report that ECC has GLOBAL MONEY at their common office at Sta: Rosa, Laguna. On 29 March 2012, EPD using the name of ECC in the alleged lending and investment-taking activities, in order On 20 March 2012, unnamed individuals. reported: that CACERES has started 3 Id., pp. 3-4. 9 Id. pp. 4-6. 5 Id., p. 2. %. Motion to Lift Cease and Desist Order(CDO) dated 28 May 2012, p. 2. 3 Id, p. 2. Cease and Desist Order dated 17 May 2012, p. 2. Id., p. 1. SEC Building, EDSA, Greenhills, Mandaluyong City Securities and Exchange Commission Republic of the Philippines Department of Finance In the Matter of: CACERES LENDING INVESTOR CO. ECC-LIVELIHOOD SOCIAL GLOBAL MONEY UNLIMITED, and SERVICES, INC. SEC-CD0 Case No. 04-12-003 DEPARTMENT ENFORCEMENT AND PROSECUTION Petitioner ORDER INVESTOR CO. GLOBAL MONEY UNLIMITED aNd ECC-LIVELIHOOD SOCIAL Order (CDO) dated 28 May 2012 filed by the respondents CACERES LENDING Pending consideration by the Commission is a Motion to Lift Cease and Desist SERVICES, INC., through their counsel, and was' received by the Commission on 05 June 2012 On 06 June 2012. the Commission issued an Order directing the respondents to -resolution pursuant to the Order issued by the Commission.on 11 June 2012: .appear at the scheduled hearing. - Thus, the Motion to Lift CDO has:been submitted for appear at the hearing on the Motion to:Lift CD0 on 11 June 2012, at 2:30 p.m. at the Office of the General. Counsel of the Commission. The respondents, however, failed to CACERES LENDING INVESTOR CO. (CACERES) was a partnership previously primary license. to operate as a partnership for the purpose of engaging in the business years:as provided for in its: Articles of Partnership.1 It was granted by the Commission a of. lending.2 registered with the SEC on 14. June 1999, and had a term of existence for ten (10) However, it has not been issued a Certificate of Authority to Operate a 1 Cease and Desist Order dated 17 May 2012, p 1. 2 Article V of its Articles of Partnership: " To engage in' a business of lending investors lending money to person and entities under terms and coniditions allowed by law provided that the company shaii not engage in financing activities under R.A. 5980 and pawnbrokering under P.D. 114."