SEC CDO Case No. 04-19-047 In Re: Organico Agribusiness Ventures Corp., EIPD

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

IN RE: ORGANICO AGRIBUSINESS VENTURES CORP.

SEC CDO Case No 04-19-047

PROTECTION DEPARTMENT. ENFORCEMENT AND INVESTOR

Movant.

RESOLUTION

For consideration of the Commission En Banc (En Banc) is the Motion to Lift (With Qualification) Cease and Desist Order (Motion) filed by Organico Agribusiness Ventures' (Organico).!

The Commission En Banc issued a Cease and Desist Order (CDO)

in the selling and/or offering for sale unregistered securities in the form of dated 28 May 2019 against Organico after it found that the latter was engaged

investment contracts to the public without the necessary secondary license from the Commission.

manifested that Organico already ceased its operations even before it has been served with the CDO. According to Organico's counsels, its client is requesting for a period of six (6) months to return the amounts invested by its During the hearing2 on the Motion, Organico through its counsels.

investors/clients. The Enforcement and Investor Protection Department (EIPD), on the other hand, argues that Organico should first submit to the Commission a list of its investors/clients with the corresponding amount of investment and scheme they invested into as well as the procedure on how Organico will return the investments it collected from its investors/clients.

In an Order dated 17 July 2019, Organico was given a period of fifteen (15) days or until 02 August 2019 to submit a Manifestation/Report copy furnishing the EIPD, with the following documents:

a. Complete List of Investors/Clients of Organico with their respective

c.List of Creditors/Suppliers, if any; b. An Audited Financial Statement of Organico; amount of contribution/investment and the scheme to which they invested;

Rv ail on 17 June 2019 on 17 Julv 2019

In Re: Organico SEC CDO Case No.04-19-047 Aorihusiness Ventutes C Page 2 of 5

d. Liquidation plan on how Organico will settle its obligations; and e Such other documents necessary to establish Organico's claim that the it is

praying for the lifting of the Cease and Desist Order to "settle its

affairs with its previous busines transactions." obligations to customers, clients, and buyers and wind up all its business

(Compliance) to Order dated 17 July 2019 averring the following: On 5 August 2019, Organico filed its Manifestation/Compliance

1. On 17 July 2019, a hearing was conducted pertaining to the Motion to Lift filed by the undersigned counsel dated 17 June 2019;

2. In the course of the hearing, ORGANICO was ordered to furnish the Honorable Commission the list of its buyers with its corresponding

amount;

3. As confided to the undersigned, since the ordered listing involves processing of personal information, ORGANICO had conducted an inquiry to its individual buyers to seek for their prior consent, pursuant to Republic Act 10173 or Data Privacy Act of 2012;

4. As confided to the undersigned, as of to date, ORGANICO failed to receive any consent from its buyers;

5. Thus, ORGANICO could not comply with the Honorable Commission's Order without the consent from its Buyer's, which is none as of to date;

The EIPD in its Comment prayed that the Motion be PARTIALLY approved but only "for the SOLE PURPOSE OF allowing Organico to disburse funds to return the investments of its investors; and MAKE

ORGANICO AGRIBUSINESS VENTURES CORP.4 PERMANENT as to all other respects, the Cease and Desist Order against

ISSUE

The sole issue to be resolved in this case is whether or not the CDO against Organico should be lifted to allow it to return the money of its investors/clients?

The Commission En Banc resolves to deny the Motion.

DISCUSSION

settle "its obligations to its customers, clients, and buyers and wind up all its From the Motion, Organico seeks the lifting of the CDO to allow it to

business affairs with its previous business transactions."5

Sibi votionto iittWith(half 6, Com nt of the EJPD h) Cease and Desist Order, Paragraph 2

In Re: Organico Agribusiness Ventures Corp SEC CDO Case No. 04-19-047 Page 3 of 's

Relatedly, the CDO directed Organico to cease and desist from:

engaging in activities of selling and/or offering for sale securities in the form of investment contracts or any others of the same nature as discussed in this Order, until the requisite registration statement is duly filed with and approved by the Commission and the corresponding permit to offer/sell is issued.

Respondents are directed to cease its internet presence relating to the above-mentioned investment activities.

At the onset, the CDO is directed towards Organico's unregistered investment taking activities. In its Motion, Organico did not deny nor provide for any defense to the finding that it is offering/selling unregistered securities in the form of investment contracts. It merely asserted that contrary to the doctrine laid down in SEC vs. Performance Foreign Exchange Corporation, the CDO was issued without proper investigation or verification.7

Organico was engaged in the selling of unregistered securities to the public.8 and it was able to gather substantial evidence to support its findings that The EIPD in its Comment argued that there was proper investigation

In effect, Organico by resorting to general denials and citing alleged procedural infirmities, and more importantly by voluntarily ceasing its operations has admitted EIPD's findings.

The burden of proof lies with Organico but it failed to adduce any evidence in its defense against the finding that it is engaged in the selling of unregistered securities to the public. There is_.no reason for the CDo pertaining to its investment taking activities to be lifted. Consequently, the Cease and desist order issued against ORGANICO on its investment taking activities is hereby made PERMANENT.

On another matter, Organico prays for the lifting of the CDO to "settle

business affairs with its previous business transactions."9 Organico finds its obligations to its customers, clients, and buyers and wind up all its

this necessary in view of the portion of the CDO which reads,

G.R. No. 15413. 20 Julv 2006. o Lift (With Qualification) Cease and Desist Order, Paragraph 5 Motion to Lif (With Qualification) Cease and Desist Order, Paragraph 2

In Re: Organico Agribusiness Ventures Cor SEC CDO Case No. 04-19-047 Page 4 of 5

indirectly, immediately upon receipt of this Order, until further if any.under theirsustody, of which the named persons herein may orders from this Commission. the activities of such corporation, officers, representatives, salesmen, and agents, are all ENIOINED from (a) transacting any and all business involying..the...funds..i..I all assets and.properties.realor.personal. including bank deposits. have any interest, claim, or participation whatsoever. whether directly or respondents or any of their representatives, or any person/s acting for and in their behalf, and such other persons directing or controlling transferring. disposing..or conyeying in any other manner.any and and to ensure the preservation of the assets for the benefit of investors. Moreover, to forestall grave damage and prejudice to all concerned, ..depositary..banks...and...fh..from.

In this regard, the EIPD requested for a list of Organico's clients with their corresponding contribution and scheme invested into for which Organico was given time to comply. However, as stated in its Compliance, Organico manifested that it cannot comply with the Order because allegedly, it failed to get the consent of the buyers as required by the Data Privacy Act (DPA)

EIPD correctly pointed out the DPA provides that: Organico's excuse for non-compliance is utterly unmeritorious. The

statutorily mandated_functions.xxx" "xxx (e) Information necessary in order to carry_out the functions of public authority which includes the processing of personal data for the performance by the independent, central monetary authority and law enforcement and regulatory agencies of their _constitutionally and supplied) (emphasis and underscoring

is excepted from the prohibition. The Commission is mandated under the Securities Regulation Code (SRC) to protect investors and the general public. Requiring Organico to submit said list is in the exercise of the Commission's mandate. Hence, Organico cannot use the DPA as an excuse for its non- compliance nor can the Commission allow Organico access to its bank accounts, deposits and other properties without proper oversight.

Furthermore, and as pointed out by the EIPD, the list of investors is only one of the documents that was required to be submitted by Organico. In its Compliance, Organico did not mention nor provide any explanation why it failed to furnish the other documents such as an audited financial statement. liquidation or distribution plan, etc.

ample time to comply with this requirement; yet, it failed to do so. This is indicative of a lack of sincerity as it made no serious effort to comply with the The documents required by the EIPD are reasonable and Organico had

Commission's Order.

I" Section 4(e) of the Data Privacy Act.

In Re: Organico SEC CDO Case No. 04-19-047 Hribusiness Ventur Page 5 of 5

Order dated 28 May 2019 is hereby made PERMANENT. Qualification) Cease and Desist Order is DENIED. The Cease and Desist WHEREFORE, premises considered, the Motion to Lift (With

Pasay City, Philippines; 10 September 2019 SO ORDERED.

EM . AQUINO

rperson

EPHYRO LUIS B. AMATONG Commissioner JAVEY PAUL D. FRANCISCO Commissioner

KEEVIN LESTER K.LEE Commissioner KARLO Commissioner . BELLO