F2M AGRI-FARM OPC, et al

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance

IN THE MATTER OF:

F2M AGRI-FARM OPC, FARM TO MARKET TARLAC CITY - MAIN

SYSTEM, HOG RAISING BUSINESS, FARM FARM2MARKET BRANCH, TO FARM TO MARKET TUGUEGARAO MARKET, PAALAGA

UNION BRANCH, FARM2MARKET LAGAWE, FARM2MARKET-SOLANO NUEVA VIZ. BRANCH,FARM TO MARKET LA TRINIDAD BENGUET, F2M AGRIVENTURE,and F2M DIGITAL DAGUPAN, TAYUG, FARM TO MARKET (F2M) RAISERS, BRANCH, FARM2MARKETLA FARM TO MARKET IFUGAO

Promulgated: 20 August 2024 SEC CD0 Case No. 08-24-114

ENFORCEMENT AND INVESTOR (EIPD), PROTECTION DEPARTMENT Movant. X X

CEASE AND DESIST ORDER

Investor Protection Department (EIPD) on 12 August 2024, praying that dated 08 August 2024 (the "Motion") filed by the Enforcement and an Order be issued: This resolves the Motion for Issuance of a Cease and Desist Order

i directing Farm to Market Tarlac City-Main Branch ("F2M Tuguegarao"), Farm to Market Dagupan ("F2M Dagupan", Tarlac City"), Farm to Market ("F2M"), Farm to Market Paalaga System ("F2M Paalaga System"), Hog Raising Business ("Hog Raising"), Farm2Market Tuguegarao Branch("F2M

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC, et al. In the matter of Page 2 of 18

any and all persons claiming and acting for and in their behalf, Pangasinan; (17) Tayug, Pangasinan; (18) Dagupan City and Pangasinan and San Fernando City, La Union, (21) Luna, La and DESIST from further engaging in the sale and/or offer of Farm2Market Lagawe, Ifugao ("F2M Lagawe"), Farm2Market- Solano Nueva Viz. Branch ("F2M Solano"), Farm to Market Tayug ("F2M Tayug"), Farm to Market La Trinidad Benguet Kono Salinas ("Mr. Salinas"), Wonderboy Tumapang ("Mr. Baguio-Radyo Ronda ("Baguio-Radyo Ronda"), Martin Augustin ("Mr. Augustin"), and F2M Agri-Farm OPC, its agents, representatives, salesmen, conduit entities, subsidiaries and including its Farm to Market Branches and their respective km. 5, La Trinidad Benguet; (2) Outlet Bet-ang Junction, Ampucao, Itogon, Benguet; (3) Outlet: Landing Tawangan Building, Abatan, Buguias, Benguet; (5) Branch Office: Nuestro Building, Purok 7, National Highway, Sta. Rosa, Bayombong, Nueva Vizcaya; (6) Branch Office: C.M. Recto Street, Dubinan East, Santiago City, Isabela; (7) Branch Office: GNH Commercial Building, Bonifacio Street, Diffun, Quirino; (8) Branch Office: Baguio City and Bontoc Mountain Province; (9) Bangued Abra; (10) Lagawe, Ifugao; (11) Tabuk City, Kalinga and Tuguegarao City, Cagayan; (12) Aparri, Cagayan; (13) Baler, Aurora; (14) Caoayan City, Isabela; (15) Solano and Bambang, Nueva Vizcaya; (16) Alaminos City and Bolinao Urdaneta City; (19) Asingan, Pangasinan; (20) San Carlos City, Union; (22) Laoag City, Ilocos Norte; (23) Vigan City, Ilocos Sur: (24) Iba, Zambales and Tarlac City; (25) Gerona, Tarlac; Santos City and Tagbilaran City, Bohol to immediately CEASE Farm2Market La Union ("F2M La Trinidad"), F2M Agriventure, F2M Digital Raisers, managers in the following areas: (1) Branch Office: 3rd Floor, Junction, Tinok, Ifugao; (4) Satellite Office: Basement, Beknan (26) Bulacan; (27} Davao City; (28) Toledo City, General unregistered securities; and Tumapang") including its co-anchors, RPN DZBS 1368 KHZ Branch ("F2M La Union"),

(ii) prohibiting these entities and personalities from transacting including bank deposits, if any, of which the named entities participation whatsoever, whether directly or indirectly, under their custody, immediately to forestall grave damage any and all businesses involving the funds in their depository other manner, any and all assets, properties, real or personal, and personalities herein may have any interest, claim or and prejudice to all concerned and to ensure the preservation banks, and from transferring, disposing, or conveying in any

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al. In the matter : Page 3 of 18

from the Commission. of the assets for the benefit of the investors without authority

PARTIES

tasked, among others, to investigate motu proprio or upon complaint or referral, violations of laws, rules, and regulations administered, implemented, or issued by the Commission, and to seek the issuance of a Cease and Desist Order whenever warranted by the circumstance.1 Movant EIPD is one of the Commission's operating departments

located at Unit 3A, E&J Bldg., 1031 JP Rizal, Conception Uno, Marikina. Corporation having been issued a Certificate of Incorporation bearing Company Registration No. 2023030089159-01. Its principal office is The F2M Agri-Farm OPC ("F2M OPC") is a registered One Person

Tuguegarao, F2M Dagupan, F2M La Union, F2M Lagawe, F2M Solano, and F2M Tayug are not registered with the Commission as corporations, partnerships or OPC2 and do not have a secondary license or authority to solicit investment or offer securities.3 F2M Tarlac City, F2M, Hog Raising, F2M Paalaga System, F2M

collectively referred to in this Order as the "F2M Entities" The Farm to Market entities, branches, officers and agents shall be

RELEVANT FACTS

investigation reports4 which the EIPD received from the Commission's Tarlac Extension Office ("Tarlac EO") and Baguio Extension Office ("Baguio EO") relating to the alleged unauthorized investment-taking activities of F2M Entities. The filing of the instant Motion came about as a consequence of the

Paalaga System (the "Paalaga System") by buying a piglet for Php5,000.00 each, and receiving a guaranteed return of Pesos: Two Thousand Six Hundred (PhP2,600.00)5 for every piglet bought after three the public, using their Facebook accounts, to invest in the F2M 3 Months Based on the said investigation reports, F2M Entities are inviting

2 Motion, par. 1. 3 Motion, par. 2. 1 SEC Office Order No. 512, Series of 2013. 4 Annex "A" of the Motion. 5 After deducting the 5% Service Charge

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al. In the matter of: Page 4 of 18

advertise the Paalaga System as one which is "Guaranteed to support you Paalaga System, including the net amount that an investor will receive after three (3) months depending on the number of piglets purchased, from START to FINISH", using the "Farm to Market" banner.6 To entice the investing public to part with their hard-earned money, the F2M Entities showcased a table which provides for the compensation scheme of the thus: (3) months. In their Facebook pages, the F2M Entities actively market and

Gusto mo bang kumita sa pamamagitan ng PAALAGA SYSTEM NG FARM TO MARKET? March 2 at 7:25 PM-G Farm to Market Tarlac City - Main Branch

Bumili ng biik sa FARM TO MARKET sa halagang 5,000php ang isa at ipaalaga ito Sa FARM TO MARKET . Ang 5,000php mo ay magiging 7,600php sa loob lamang ng 3 buwan! * Paano?

Magalaga, magpakain hanggang sa maibenta ito sa Market Halina at makipag partner na sa amin dito sa FARM TO MARKET PAALAGA SYSTEM ating branch manager Ferrari February (+63 966 378 2391) Para sa mga karagdagang impormasyon mag message lamang sa aming page o sa O kaya naman ay magtungo sa aming office 2nd Floor, Villa Leticia Subdivision Commercial Bldg., Matatalaib, Tarlac (infront of Iglesia ni Cristo) . Ano pang hinihintay mo? Si FARM TO MARKET na ang bahala sa LAHAT. MORE BIIK MOREKITA

FARM TO MARKET Guaranteed to support you from START to FiNISH

F2M 3 MONTHS PAALAGA SYSTEM

Total Cost Cost Per Pialet EarningPer Piglet OVER-ALL TOTAL Less : 5% 5ervico Charge NET Amount to be received after 3 No.of Piriets Total Earnin MOnthS(CAPITALaDdEARNINGS) 5 5,00 8 3,00 3. 6 1 24,00 10500 1,200 5,0 3 9 3 250 15, 0 .00 500 300 2,000 5 100 56,00 30,0 $3.200 3.00 2 1 500 30 , 76.000 5 0 3 4,000 10 152,00 10,O 150,0 60, 3, S 2

PhP52,000.00 or 52% of the amount invested within a period of three (3) PhP100,000.00 for twenty (20) piglets for example will have a yield of Under the said d compensation scheme, an investment of

6 Motion. See Annex "A"

CEASE AND DESIST ORDER SEC CD0 Case No. 08-24-114 F2M AGRI-FARM OPC, et al In the matter of Page 5 of 18

months. All that is needed from investors is to deposit their investment, the amount of which is dependent on the number of piglets that they want to purchase.7

representative in the registration process with the Commission, although his name appeared as the registered owner of F2M Agricultural Farm based on the Certificate of Business Registration issued by the of the Farm to Market appearing in the Facebook Page of F2M Tarlac.10 The records also showed that Mr. Salinas was F2M OPC's authorized Department of Trade and Industry. Salinas is also the operator/endorser sole incorporator/stockholder/director of the F2M OPC is Mr. Augustin.: The investigation reports also revealed and confirmed that the

reports, the EIPD conducted an independent investigation to determine Securities Regulation Code (SRC), the Revised Corporation Code (RCC) and/or other laws, rules and regulations administered and/or whether the activities of the F2M Entities constitute a violation of the implemented by the Commission. On the basis of the information provided in the investigation

principal F2M OPC in Marikina on 12 April 2024, where it was able to confirm that the address provided in its AOI is a sham as it is not holding office or conducting any business therein.11 The EIPD likewise secured a that the TIN which he provided to the Commission when he applied for confirmation from the Bureau of Internal Revenue that Mr. Agustin has not yet been issued a Tax Identification Number (TIN)12, which means the registration of F2M OPC was false. Specifically, the EIPD conducted a surveillance operation at the

not registered with the DTI: the Farm to Market branches in Tarlac City. Dagupan, La Union, Lagawe, Ifugao, Solano Nueva Vizcaya, and Tayug.13 (BNRS), the EIPD was able to verify that the following F2M Entities are Moreover, using the DTI Business Name Registration System

Branch, F2M Lagawe, F2M Solano and F2M Tayug) which was carried out (specifically F2M Tuguegarao Branch, F2M Dagupan, F2M La Union The online search on the Facebook Pages of the F2M Entities

8 Id. par 9 9 Id. See Annex "C" 7 Ihid 10 Id. par. 10. 12 Id. Annex "H" and "I" 13 Id. par. 7. See also Annex "B" to "B-9" 11 Id. Annex "J".

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC, et al In the matter of: Page 6 of 18

investments from the public using the Paalaga System, thus: by the EIPD confirmed that they are all actively marketing and soliciting

C

P

2

MAG-NEGOSYO AT UMASENSO!!! Hog tartning Partuerahip truYYsF)

8TART YOUR 30f INE8S AT THF

: CAPITALSTARTSATP5.000 NO STRES8! HASSLE FREE! FIXOUARTERLY RETURN

offer/sale of unregistered securities without the requisite license from by the Commission's Markets and Securities Regulation Department registered securities under Sections 8 and 12 of the SRC; have not filed an application for the registration of, and/or a license to sell securities; issuers of mutual funds, exchange traded funds and proprietary/non- proprietary shares or membership certificates and timeshares under the Commission, the EIPD submitted in evidence the Certifications issued (MSRD)14 and Corporate Governance and Finance Department (CGFD)15, which both attested that F2M OPC and the F2M Entities have not have not been issued any license to sell securities; and are not registered Sections 8 and 12 of the SRC To substantiate its allegation that F2M entities are engaged in the

has not been issued a secondary license as a broker and/or dealer of Registration and Monitoring Department (CRMD) affirmed that F2M OPC On the other hand, the Certification issued by the Company

15 Ibid., Pars. 7-8 and Annex "D" 14 Ibid., Pars. 7-8 and Annex "C"

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC,et al In the matter Page 7 of 18

investment company, investment house and transfer agent and has not filed nor has any pending application for a secondary license.16 securities, dealer in government securities, investment adviser of an

to Market Paalaga System, Farm2Market Tuguegarao Branch, Farm to Tarlac City-Main Branch, Farm to Market, Hog Raising Business and Farm Market Dagupan, Farm 2 Market La Union Branch, Farm2Market Lagawe, Ifugao, Farm2Market-Solano Nueva Viz. Branch and Farm to Market Tayug are not registered as corporation, partnership or OPc.17 The CRMD also issued a Certification stating that Farm to Market

investments from the public without the requisite license. The Advisory warned the public to exercise caution in dealing with any individual or public that F2M OPC and F2M Entities are offering and/or soliciting group of persons soliciting investments for and on behalf of these F2M On 16 April 2024, the Commission issued an Advisory informing the

entities, and not to invest or stop investing with the latter.18

solicitation activities through the Paalaga System. In this regard, the reports from the public on F2M Entities sustained investment-taking and Baguio E0, through a report19, confirmed that the F2M Office in La website that features its business operations and Youtube videos, to entice the public to invest in its Paalaga System.20 The website features F2M Entities. Trinidad, Benguet continue to be operational, and even launched a Mr. Tumapang, a media personality of RPN DZBS 1368 KHZ who is actively promoting the unauthorized investment scheme of F2M OPC and Despite the issuance of an Advisory, the EIPD continued to receive

Hence, the instant Motion.

ISSUE

support of its Motion warrant the issuance of a CDO against F2M OPC and Whether the allegations and the evidence presented by the EIPD in

F2M Entities.

19 Memorandum dated 17 July 2024 20 Motion, par. 24. 16 Annex "L" of the Motion. 18 SEC Advisory dated 16 April 2024 17 Annexes "M" & "N" of the Motion

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al In the matter of. Page 8 of 18

RULING

the same. The Commission finds the Motion meritorious and hereby grants

OPC, the F2M Entities and their conduits are offering and/or selling unregistered securities to the public in the form of investment contracts without the requisite license from the Commission. The EIPD was likewise able to establish that F2M OPC, the F2M Entities and their conduits are themselves bereft of any license to sell securities. The EIPD was able to establish by substantial evidence that F2M

Section 3.1 of the SRC defines securities as follows:

includes: "SEC. 3. Definition of Terms. ~ 3.1. "Securities" are shares participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate contract, instrument, whether written or electronic in character. It

X X X

profit-sharing agreement, certificates of deposit for a future subscription; xxx. (b) Investment contracts, certificates of interest or participation in a

intended to be liberally construed in order to achieve the main purpose securities acts of other jurisdictions, specifically the United States of America, the SRC adopted a very broad definition of securities21, which is of its enactment: regulation of the issuance and sale of securities and prevention of fraud. At the outset, emphasis should be made on the fact that just like the

SRC (the "SRC-IRR") defines an investment contract as follows: Rule 26.3.5 of the 2015 Implementing Rules and Regulations of the

common enterprise and is led to expect profits primarily from the efforts of others. An investment contract is presumed to exist whenever a person seeks to use the money or property of others on the promise of profits. "An investment contract means a contract, transaction or scheme (collectively "contract") whereby a person invests his money in a

investors "pool" their resources, creating a common enterprise, A common enterprise is deemed created when two (2) or more

3.1 of the SRC) 21 "Securities are shares, participation or in venture and evidenced by a certificate, contract, instrument, whether written or electronic in character." (Section or profit-making

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al In the matter of. Page 9 of 18

even if the promoter receives nothing more than a broker's commission." (Emphasis and underscoring supplied)

in a common enterprise with the expectation that they would earn a whereby a person (1) makes an investment of money, (2) in a common enterprise, (3) with the expectation of profits, (4) to be derived solely adopted in various situations where individuals were led to invest money American origin. It traces its roots from the US Supreme Court case Securities and Exchange Commission v. W.J. Howey Co.22 where the Court stated that an investment contract is a transaction, contract, or scheme from the efforts of others. Investment contracts have been used and profit through the efforts of the promoter or of someone other than themselves.23 The concept of an investment contract in the Philippines is of

the globe who have been duped by scamsters and con artists, the Philippine Supreme Court, adopting the doctrine in the United States (US) vs Securities and Exchange Commission24 (Power Homes Case), that while as a general rule, the four (4) elements must be shown to exist, the term cover schemes devised by persons who seek to use the money of others on the promise of profits, thus: case of SEC v. W.J. Howey Co., held in Power Homes Unlimited Corporation "investment contract" embodies a flexible principle that is intended to Cognizant of the fact borne by the sad experiences of people around

investment of money, (2) in a common enterprise, (3) with the traces its roots from the 1946 United States (US) case of SEC v. W.J. Supreme Court, recognizing that the term "investment contract" was not defined by the Act or illumined by any legislative report, held that adoption of the Securities Act. Thus, it ruled that the use of the catch- all term "investment contract" indicated a congressional intent to cover a wide range of investment transactions. It established a test to transaction, contract, or scheme whereby a person (1) makes an expectation of profits, (4) to be derived solely from the efforts of others. Although the proponents must establish all four elements, the "It behooves us to trace the history of the concept of an investment contract under R.A. No. 8799. Our definition of an investment contract Howey Co. In this case, the US Supreme Court was confronted with the issue of whether the Howey transaction constituted an "investment contract" under the Securities Act's definition of "security." The US "Congress was using a term whose meaning had been crystallized" under the state's "blue sky" laws in existence prior to the determine whether a transaction falls within the scope of an "investment contract." Known as the Howey Test, it requires

23 Ibid. Although the definition as stated in the Howey Case qualified that the earning of profit was expected to be money exerted a small amount of effort in an attempt to earn the profits. 24 G.R. No. 164182, February 26, 2008 solely through the efforts of another party, Rule 26.3 of the 2015 IRR of the SRC replaced the qualifier with "primarily", acknowledging that an investment contract may still be present where the individual who placed the 22 328 U.S, 293, 66 S. Ct. 1100,90 L. Ed. 1244, 163 A.L.R. 1043 (1946)

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al In the matt. Page 10 of 18

of whether its issuer was engaged in fraudulent practices." (Emphasis flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits." Needless to state, any investment contract covered by the Howey Test must be registered under the Securities Act, regardless US Supreme Court stressed that the Howey Test "embodies a supplied}

a particular instrument which defines whether the same should be commerce based on the terms thereof, to wit: Supreme Court emphasized that it is not the nature of the assets behind considered a security. What is controlling is the attribution given in Moreover, in the US case of SEC v. Joiner Leasing Corp.25, the US

guided by the nature of the assets back of a particular document or represented to be." (Emphasis supplied) "In applying acts of this general purpose, the courts have not been offering. The test, rather, is what character the instrument is given in commerce by the terms of the offer, the plan of distribution, and the economic inducements held out to the prospect. In the enforcement of an act such as this, it is not inappropriate that promoters' offerings be judged as being what they were

in finance, merely rely on the proponent's knowledge and expertise in profits of the operations. In this regard, the importance of a "common carrying out the grand investment scheme. The Power Homes Case thus registered with the Commission prior to its offer/sale for the protection of the public, thus: considered to exist once it is determined that the proponent is offering to the purchasers an opportunity to contribute money and to share in the enterprise" managed by the proponent in furtherance of the business, emphasized the mandatory nature of having an investment contract comes into play considering that purchasers who are normally untrained Under the foregoing legal precepts, an investment contract is

must be registered with public respondent SEC, otherwise 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 level of confidence in the system." (Emphasis supplied) "As an investment contract that is security under R.A. No. 8799, it

F2M Entities and their cohorts involves the offer/sale of unregistered Commission finds and so holds that the Paalaga System of F2M OPC, the Applying the foregoing parameters to the instant case, the

25 320 U.s. 344 (1943) [https:/supreme.justia.com/cases/federal/us/320/344/]

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al. In the matter of: Page 11 of 18

securities in the form of investment contract by entities that have no in this case, to wit: license to sell securities. All the elements of the Howey Test are present

investment of money which makes a potential investor commit or give his money to an enterprise or venture in a manner that subjects himself to financial loss.26 Specifically, buying such number of piglets that are consistent with their First, the Paalaga System is clearly a scheme that requires an was submitted in evidence affirms this, to wit: the Paalaga System requires the public to invest money by risk appetite. The Facebook post of F2M Entities below which

FARM MARKET

PAANO MAG-APPLY SA PAALAGA

bank account ng company then i-bigay c SEP 1 I-deposit ang pambili ng biik dinetso ss amin ang kopya ng dopoclt or tranrnction

nag-urmpisa, kung kean matatapoo ang 3 monitoring. Dito makikita iung ilang blik 8 ang inyong binili, kung kelan kyo TEP? pigyan kayo ng link para gumawa ng ital platform para sa inyong onilne ng magkano ang babayaran s.

C1C

which has for its purpose the protection of the investing defrauded, it being sufficient that the scheme requires the public to invest money in the target entity. public, it is not required that investors are actually Considering that what is sought is the issuance of a CDo

enterprise element. The Paalaga System involves the pooling Second, a common enterprise is deemed created when two (2) or more investors "pool" their resources. Thus, joint achieved by pooling the invested funds for a common purpose, is required in order to satisfy the common cohorts use to pay off the guaranteed returns to existing participation by investors in the same investment enterprise of investors' money which F2M OPC, F2M Entities and their

26 SEC v. International Mining Exchange, Ic., 515 F. Supp. 1062.

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC, et al. In the matter of. Page 12 of 18

being sustained by the investments received from the public investors, sans the hogs. In other words, similar to previous investment scams which this Commission has foiled, F2M the public that they are buying piglets when there are in fact none. The Paalaga System essentially involves the solicitation and collection of investments which the perpetrators pool and manage by paying-off a portion thereof to pay the guaranteed returns. This is the common enterprise that is OPc, F2M Entities and their cohorts are making it appear to who believes that their investments yield lucrative returns generated from the piglets allegedly raised by F2M OPC and F2M Entities. The receipt by existing investors of the

the Paalaga System is legitimate and sustainable, resulting in more investors being duped. guaranteed returns sends a false message to the public that

At this juncture, it readily becomes clear that the Paalaga promise of high returns. System is essentially a ponzi scheme, an investment fraud which pays the existing investors of F2M OPC and the F2M Entities with the investments collected from new investors who are lured to part with their hard-earned money under a

and reason why the investing public is lured into investing its Third, profit is either through capital appreciation resulting from the development of the initial investment, or funds. In both cases, investors are attracted primarily by the prospects of a return on their investment. In the instant case the Paalaga System guarantees a quarterly income of at least 50% of the amount invested. This is the main consideration hard-earned money. participation in earnings resulting from the use of investorsj

Lastly, investors expected to earn their guaranteed profits investments to F2M OPC, F2M Entities and/or their cohorts required to perform any act other than to entrust their and wait for the maturity date to arrive which will enable primarily from the efforts of others i.e. investors are not

and F2M Entities in fact promises a "no stress", "hassle free" F2M OPC, F2M Entities and/or their cohorts who carry out guaranteed returns to early investors to ensure the coming- in of new investors. The advertising materials of F2M OPc extensive marketing activities and the payment of the them to get the promised payout. In the instant case, the guaranteed profits are derived primarily from the efforts of

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC, et al. In the matter o. Page 13 of 18

piggery business "at the comfort of your home" and assured that: "Farm to Market na ang bahala sa lahat"

Entities and their cohorts are engaged in the unauthorized offering of media platforms i.e. Facebook accounts, Youtube and radio broadcasting This constitutes public offering under Rule 3.1.17 of the SRC IRCC, to wit: unregistered securities inasmuch as they are using the internet/social to advertise and market their unauthorized investment-taking scheme. Furthermore, the Commission also holds that F2M OPC, F2M

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: "3.1.17. Public offering is any offering of securities to the public or

X X X

3.1.17.3. Advertisement or announcement on radio, television, communication technology or any other forms of communication; xxx." (Emphasis supplied) telephone, electronic communications, information

securities within the Philippines if the same is not registered with the Commission in the form of an approved Registration Statement and a Permit to Offer/Sell issued in favor of the application, to wit: Section 8.1 of the SRC prohibits the sale, offer or distribution of

may prescribe, shall be made available to each prospective purchaser." securities, in such form and with such substance as the Commission "SEC. 8. Requirement of Registration of Securities. - 8.1. Securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission. Prior to such sale, information on the (Emphasis supplied)

representatives are engaged in the unauthorized sale/offer of securities all confirmed the finding that the F2M entities, its agents and considering that they have no license to carry out such activities. The Negative Certifications issued by the MSRD, CGFD, and CRMD

stop their unauthorized investment-taking activities for the protection of secured the registration of any securities, and have no license to offer, sell or deal with the same, this Commission is duty-bound to immediately the investing public. The immediate issuance of the instant CDO becomes a necessary imperative. Considering that F2M OPC, F2M Entities and their cohorts have not

CEASE AND DESIST ORDER SEC CD0 Case No. 08-24-114 F2M AGRI-FARM OPC, et al. In the matter of Page 14 of 18

cause grave or irreparable injury or prejudice to the investing public. or practice will operate as a fraud on investors or is otherwise likely to CDO without the necessity of conducting a hearing if, to its mind, the act thus: Section 64.1 of the SRC provides that the Commission may issue a

is otherwise likely to cause grave or irreparable injury or prejudice to the investing public." (Emphasis supplied) investigation or verification, motu 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 "SEC. 64. Cease and Desist Order. - 64.1. The Commission, after proper

requisites that must be complied with for a CDO to be validly issued, to Wit: Under the afore-quoted provision, there are two (2) essential

1 There must be a conduct of a proper investigation or

verification; and

2} There must be a finding that the act or practice, unless

likely to cause grave or irreparable injury or prejudice to the restrained, will operate as a fraud on investors or is otherwise investing public.27

showing the compensation scheme and marketing/advertising materials, complied with. The EIPD conducted an independent investigation and presented substantial evidence to support the allegations in its Motion e.g. Reports from Tarlac EO, Baguio EO, Certifications from the Commission's CRMD, MSRD and CGFD, screenshots of Facebook posts the BIR Certification, the DTI BNRS system screenshots, and the Youtube In the instant case, We find that the foregoing requisites were

video of Mr. Tumapang, among others.

activities of F2M OPC, F2M Entities and their cohorts operate as a fraud investment contract constitutes fraud which should be promptly cohorts' act of selling/offering unregistered securities in the form of restrained for the protection of the investing public. This finds support in based on the evidence presented, the unauthorized investment-taking on investors, or is likely to cause grave or irreparable injury or prejudice to the investing public, if not restrained. F2M OPC, F2M Entities and their Anent the second requirement, this Commission is convinced that

27 Securities and Exchange Commission vs. Performance Foreign Exchange Corporation (G.R. No. 154131, July 20, 2006

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al In the matter of. Page 15 of 18

the case of SEC v. CJH Development Corp.,28 where the Supreme Court categorically held that:

to issue a cease and desist order that aims to curtail fraud or grave or irreparable injury to investors. There is a good reason for this results can only generate further injury to the public that the SEc is obliged to protect. issued by the SEC motu proprio, it being unnecessary that it results from a verified complaint from an aggrieved party. A prior hearing is also not required whenever the Commission finds it appropriate provision, as any delay in the restraint of acts that yield such "The law is clear on the point that a cease and desist order may be

The act of selling unregistered securities would necessarily by making it appear that respondents have authority to deal on such securities. Section 8.1 of the SRC clearly states that securities Philippines without a registration statement duly filed with and approved by the SEC and that prior to such sale, information on the securities, in such form and with such substance as the SEC may operate as a fraud on investors as it deceives the investing public shall not be sold or offered for sale or distribution within the prescribe, shall be made available to each prospective buyer. (Emphasis supplied)

unlicensed persons/entities who promise high return of investments immediately issue the instant CDO considering that financial fraud constitutes as financial fraud under Republic Act No. 11765, otherwise (FCPA), inasmuch it involves the sale/offer of unregistered securities by made by the investors themselves. This fact further bolsters the need to known as the Financial Products and Services Consumer Protection Act which will clearly be sourced from the investments or contributions constitutes a crime under the FCPA. Finally, this Commission equally finds that the Paalaga System

Main Branch, Farm to Market, Farm to Market Paalaga System, Hog Market Dagupan, Farm2Market La Union Branch, Farm2Market Lagawe, Ifugao, Farm2Market-Solano Nueva Viz. Branch, Farm to Market Tayug, Farm to Market La Trinidad Benguet, F2M Radyo Ronda, Martin Augustin, F2M Agri-Farm OPC, its agents, areas: (1) Branch Office: 3rd Floor, km. 5, La Trinidad Benguet; (2) Raising Business, Farm2Market Tuguegarao Branch, Farm to Agriventure, F2M Digital Raisers, Kono Salinas, Wonderboy Tumapang including its co-anchors, RPN DZBS 1368 KHZ Baguio- representatives, salesmen, conduit entities, subsidiaries and any and all persons claiming and acting for and in their behalf, including the Farm to Market Branches and their respective managers in the following WHEREFORE, premises considered, Farm to Market Tarlac City-

28 G.R. No. 2103 16, 28 November 2016.

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC, et a In the matte Page 16 of 18

requisite registration and registration statements are duly filed with and and DESIST from further engaging in the sale and/or offer of unregistered offering for sale of unregistered securities in the form of investment contracts and/or other activities/transaction relative thereto, until the approved by the Commission, and the corresponding license and/or permit to offer/sell securities are issued. Outlet Bet-ang Junction, Ampucao, Itogon, Benguet; (3) Outlet: Basement, Beknan Building, Abatan, Buguias, Benguet; (5) Branch Dubinan East, Santiago City, Isabela; (7) Branch Office: GNH Commercial Building, Bonifacio Street, Diffun, Quirino; (8) Branch Office: Baguio City and Bontoc Mountain Province; (9) Bangued Abra; (10) Lagawe, Ifugao; (11) Tabuk City, Kalinga and Tuguegarao Caoayan City, Isabela; (15) Solano and Bambang, Nueva Vizcaya; (16) Alaminos City and Pangasinan; (18) Dagupan City and Urdaneta City; (19) Asingan, Gerona, Tarlac; (26) Bulacan; (27) Davao City; (28) Toledo City, securities under Benson Ocmija are hereby ordered to IMMEDIATELY CEASE AND DESIST from further engaging in activities of selling and/or Landing Tawangan Junction, Tinok, Ifugao; (4) Satellite Office: Office: Nuestro Building, Purok 7, National Highway, Sta. Rosa, Bayombong, Nueva Vizcaya; (6) Branch Office: C.M. Recto Street, City, Cagayan; (12) Aparri, Cagayan; (13) Baler, Aurora; (14) Vigan City, Ilocos Sur: (24) General Santos City and Tagbilaran City, Bohol to immediately CEASE Pangasinan; (20) San Carlos City La Union, (21) Luna, La Union Bolinao Pangasinan; (17) Tayug, Zambales and Tarlac City; (25) ) Laoag City, Ilocos Norte; (23) asinan and San Fernando City.

Farm to Market Dagupan, Farm2Market La Union Branch, Radyo Ronda, Martin Augustin, F2M Agri-Farm OPC, its agents, representatives, salesmen, conduit entities, subsidiaries and any and all Market Branches and their respective managers in the following areas: (1) Branch Office: 3rd Floor, km. 5, La Trinidad Benguet; (2) Landing Tawangan Junction, Tinok, Ifugao; (4) Satellite Office: Basement, Beknan Building, Abatan, Buguias, Benguet; (5) Branch Bayombong, Nueva Vizcaya; (6) Branch Office: C.M. Recto Street, Tarlac City-Main Branch, Farm to Market, Farm to Market Paalaga System, Hog Raising Business, Farm2Market Tuguegarao Branch, Farm2Market Lagawe, Ifugao, Farm2Market-Solano Nueva Viz. Branch, Farm to Market Tayug, Farm to Market La Trinidad Benguet, F2M Agriventure, F2M Digital Raisers, Kono Salinas, Wonderboy Tumapang including its co-anchors, RPN DZBS 1368 KHZ Baguio- persons claiming and acting for and in their behalf, including the Farm to Outlet Bet-ang Junction, Ampucao, Itogon, Benguet; (3) Outlet: Office: Nuestro Building, Purok 7, National Highway, Sta. Rosa, Finally, the Commission hereby PROHIBITS Farm to Market

CEASE AND DESIST ORDER SEC CDO Case No. 08-24-114 F2M AGRI-FARM OPC, et a In the matter of. Page 17 of 18

indirectly, under their custody, immediately to forestall grave damage La Union, (21) Luna, La Union; (22) Laoag City, Ilocos Norte; (23) interest, claim or participation whatsoever, whether directly or Dubinan East, Santiago City, Isabela; (7) Branch Office: GNH Pangasinan; (18) Dagupan City and Urdaneta City; (19) Asingan, Pangasinan; (20) San Carlos City, Pangasinan and San Fernando City, Gerona, Tarlac; (26) Bulacan; (27) Davao City; (28) Toledo City, General Santos City and Tagbilaran City, Bohol to immediately CEASE and DESIST from further engaging in the sale and/or offer of unregistered securities from transacting any and all business involving fund in its other manner, any and all assets, properties, real or personal, including bank deposits, if any, of which the named persons herein may have any and prejudice to all concerned and to ensure the preservation of the assets for the benefit of the investors without authority from the Commission. Commercial Building, Bonifacio Street, Diffun, Quirino; (8) Branch Office: Baguio City and Bontoc Mountain Province; (9) Bangued Abra; (10) Lagawe, Ifugao; (11) Tabuk City, Kalinga and Tuguegarao City, Cagayan; (12) Aparri, Cagayan; (13) Baler, Aurora; (14) Caoayan City, Isabela, (15) Solano and Bambang, Nueva Vizcaya; (16) Alaminos City and Bolinao Pangasinan; (17) Tayug, Vigan City, Ilocos Sur; (24) Iba, Zambales and Tarlac City; (25) depository banks, and from transferring, disposing, or conveying in any

The EIPD is hereby DIRECTED to:

1) Serve this Cease and Desist Order upon F2M Agri-Farm OPC; and

2) Cause the posting of this Cease and Desist Order in the Commission's website.

report, by way of a pleading, to the Commission En Banc within ten (10) days from receipt of this Order. The EIPD is FURTHER DIRECTED to submit a formal compliance

and Monitoring Department, Markets and Securities Regulation government unit(s) for their information and appropriate action. Department, Corporate Governance and Finance Department and the Information and Communications Technology 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 Let a copy of this Order be furnished to the Company Registration

SEC CDO Case No. 08-24-114 CEASE AND DESIST ORDER F2M AGRI-FARM OPC, et al. In the matter of. Page 18 of 18

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 Part II, Rule IV, Section 4-3 of the 2016 Rules of Procedure of the SEC, the from receipt of this Order. In accordance with the provisions of Section 64.3 of the SRc and

FAIL NOT UNDER PENALTY OF LAW

SO ORDERED.

Makati City, Philippines.

EMILIO B. AOUINO*

Chairperson

JAVEY PAUL D. FRANCISCO KARLO S.BELLO

Commissioner Commissioner

MCWLL BRYANT T. FERNANDEZ ROGEO VQUEVEDO

Commissioner Commissioner

*On Official Business