EVER ARM ANY MARKETING

Securities and Exchange Commission Department of Finance Republic of the Philippines PICC Secretariat Bidg., Roxas Blvd., Pasay City COMMISSION EN BANC In the Matter of: EVER ARM ANY MARKETING SEC CD0 Case No. 06-19-050 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT (EIPD), Movant. X CEASE AND DESIST ORDER This resolves the Motion for Issuance of a Cease and Desist Order (Motion) filed on June 3, 2019 by the Enforcement and Investor Protection Department (EIPD) praying to enjoin EVER ARM ANY MARKETING and it's officers, representatives, salesmen, agents and any and all persons claiming and acting for and in its behalf, from any unauthorized public solicitation of investments and sale of securities in the form of investment contracts. Based on the records of the Commission, EVER ARM ANY MARKETING (EVER ARM) is not registered with the Commission either as a corporation or partnership but a sole proprietorship whose business name is registered with the Department of Trade and Industry (DTI) The investigation against respondent EVER ARM stemmed from reports received by the Commission that EVER ARM is offering five hundred percent (500%) of investment in less than a month. Upon validation by the EIPD of the investment taking activities of EVER ARM from the latter's Facebook account and various promotional Youtube videos, an ADVISORY was posted on the Commission's website on 31 May 2019 on the activities of respondent EVER ARM.2 and Monitoring Department3, the records of the Commission do not show the Based on the 3 June 2019 Certification issued by the Company Registration registration of EVER ARM ANY MARKETING as a corporation or partnership. ADVISORY on EVER ARM ANY MARKETING posted on the Commission's website on May 31, 2019. 3 June 2019 Certification issued by the Company Registration and Monitoring Department. Snapshot of EVER ARM ANY MARKETING Facebook page. On the other hand, the 3 June 2019 Certification of the Corporate Governance and Finance Department4 (CGFD) states that based on the records on file with the Commission, EVER ARM ANY MARKETING is not a registered issuer of mutual funds, exchange traded funds and proprietary/non proprietary shares or membership certificates and timeshares pursuant to Sections 8 and 12 of the Securities Regulation Code and therefore not licensed to offer and sell such securities to the public. Likewise, the Commission's Markets and Securities Regulation file with the MSRD, EVER ARM ANY MARKETING has not registered any Department (MSRD) stated in its 3 June 2019 Certification5 that per records of securities pursuant to Sections 8 and 12 of the Securities Regulation Code (SRC). Likewise, the MSRD has not issued Permit to Sell Securities in favor of EVER ARM ANY MARKETING. Further, said entity has not filed nor has any pending application for registration/permit to sell securities. Based on the verification conducted by the EIPD, the latter found sufficient evidence showing that EVER ARM is soliciting investments from the public employing what is commonly known as a Ponzi scheme in its investment Scheme. Hence, we find the Motion meritorious. ARM is engaged in the offer and/or sale of securities to the public in the form of investment contracts without the necessary license from the Commission. EIPD's Motion as supported by substantial evidence, shows that EVER Securities are "shares, participation or interests in a corporation or in a an "investment contract" commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character" and includes In a plethora of cases, it has been stated that an "investment contract" is a transaction, contract, or scheme whereby a person: (1) makes an investment of money; (2) in a common enterprise; (3) with the expectation of profits; and (4) to be derived solely from the efforts of others.6 This definition has been adopted by the Supreme Court of the Philippines which succinctly stated that common enterprise; (3) with expectation of profits; and (4) primarily from by the Commission, must be proved to be (1) an investment of money; (2) in a efforts of others.7 an investment contract in our jurisdiction, to be a security subject to regulation 3 June 2019 Certification issued by the Markets and Securities Regulation Department. Securities and Exchange Commission v. W.J. Howey Co 328 U.S. 293, 66 S. Ct. 1100, 90 L.Ed. 1224, 163 Power Homes Unlimited Corporation v. Securities and Exchange Commission G.R. No. 164182, February 26, 2008. A.L.R. 1043 (1946) 3 June 2019 Certification issued by the Corporate Governance and Finance Department. 2 As aptly elucidated by the EIPD, it was able to show that the investment scheme of respondent EVER ARM falls within the ambit of an investment contract because of its essential features, as follows: 1 The investor enters into a contract. There is a placement of money where for a certain sum the investors are guaranteed Five hundred percent (500%) return in less than a month. (2) The money invested is placed in a common enterprise and the investor-member expects to derive profits. (3) Finally, the member-investor expects to earn profits from the entrepreneurial and managerial efforts of others. The investor need not do anything but go to the office of EVER ARM and receive the guaranteed return to them. The investors just have to invest money. Having established that the investment scheme of EVER ARM is an investment contract, the provisions of Section 8.1 of the SRc should be complied with before said securities could be offered or sold to the public. Market Securities Regulation Department (MSRD) and Corporate Governance and Finance Department (CGFD) of this Commission. to the general public sans the necessary license or permit as attested by the Thus, EVER ARM has engaged itself in offering or selling such securities at all to investors as exemplified in the case of People of the Philippines vs. Palmy a Ponzi scheme as it promises an exorbitant rate of return with little or no risk Tibayan and Rico Z. Puerto (G.R. Nos. 209655-60, January 14, 2015), where the Further, the investment scheme of EVER ARM has the characteristics of Supreme Court held that: investment fraud that involves the payment of "To be sure, a Ponzi scheme is a type of purported returns to existing investors from funds contributed by new investors. Its organizers often solicit new investors by promising to invest funds in little or no risk. In many Ponzi schemes, the opportunities claimed to generate high returns with difficult to sustain the scheme over a long period of to create the false appearance that investors are works only as long as there is an ever increasing make promised payments to earlier-stage investors profiting_from a legitimate business. It is not an number of new investors joining the scheme. It is perpetrators_focus on attracting new money to investment strategy but a gullibility scheme, which 3 time because the operator needs an ever larger pool of later investors to continue paying the promised profits to early investors. The idea behind this type of swindle is that the "con-man" collects his money from his second or third round of investors and then absconds before anyone else shows up to collect. Necessarily. (Underscoring added for emphasis) Ponzi schemes only last weeks, or months at the most.' The EIPD adduced sufficient evidence to support its allegations that EVER ARM is engaged in offering for sale securities to the public through potential investors without prior registration. Thus, Section 64 of the Securities indiscriminate or random offering online8 promoting its investment scheme to Regulation Code would apply, to wit: SEC. 64. Cease and Desist Order. - 64.1. The Commission, after proper investigation or verification, motu proprio, or upon verified complaint by any aggrieved party, may issue a cease and desist order judgment the act or practice, unless restrained, will without the necessity of a prior hearing if in its operate as a fraud on investors or is otherwise likely to investing public. cause grave or irreparable injury or prejudice to the EVER ARM from further offering and selling unregistered securities to the public. Thus, it is necessary that a Cease and Desist Order be issued to enjoin public. Otherwise, to allow EVER ARM to continue soliciting investments The Commission is duty-bound to protect the interest of the investing license or permit will operate as a fraud on investors or is likely to cause grave and/or selling or offering for sale securities to the public without the necessary or irreparable injury or prejudice e to the investing public.9 further grave injury or prejudice to the investing public. Likewise, it is offering and sale of such securities without the required license from the Commission makes the public offering and selling a continuing illegal act. EVER ARM ANY MARKETING should be immediately restrained to prevent any imperative that a Cease and Desist Order be issued as the continued public Hence, the selling or offering for sale of securities by the respondentio ITS ALLIED ENTITIES, their partners, officers, agents, representatives, WHEREFORE, premises considered, EVER ARM ANY MARKETING AND 8: Under Rule 3.1.17.4 of the 2015 SRC Rules, any offering, solicitation and presentation of securities for sale 9 In the matter of Boracay Transpacific Properties Inc. & Paradisya Land Inc., SEC CDO Case No. 07-14-01 10 https://www.facebook.com/JeanELopez/posts/2207043299365559 to the public through information communication technology, such as internet, shall be presumed to be a February 26, 2015. public offering. conduits, assigns and ANY AND ALL PERSONS CLAIMING AND ACTING FOR DESIST UNDER PAIN OF CONTEMPT, from engaging in activities of selling AND IN THEIR BEHALF are hereby ordered to IMMEDIATELY CEASE AND and/or offering for sale securities in the form of investment contracts or any other forms of the same nature, as discussed above. Furthermore, the subject entities and individuals are directed to CEASE from promoting its investment scheme through the internet and/or delete or from the websites. remove immediately the promotional presentation of such investment scheme Moreover, to forestall grave damage and prejudice to all concerned and to ensure the preservation of the assets for the benefit of the investors, respondents or any of their representatives, or any person/s acting for and in their behalf, and such other persons directing or controlling the activities of depository banks, and b) from transferring, disposing or conveying in any other manner any and all assets, properties, real or personal, and including bank such corporation, officers, representatives, salesmen and agents, are all ENJOINED from a) transacting any and all business involving the funds in its deposits, if any, of which the named persons herein may have any interest, claim or participation whatsoever, whether directly or indirectly, under their custody, immediately upon receipt of this Order, until further orders from this Commission. The Enforcement and Investor Protection Department and/or the Commission's Extension Offices having jurisdiction over the area where the principal office of the subject of this Cease and Desist Order is located, are ITS ALLIED ENTITIES, its General Manager, In-House Counsel or partners; and 2) post copies of the Order at the entrance of the main office and/or branches, hereby directed to: (1) serve this Order to EVER ARM ANY MARKETING AND if anY, of EVER ARM ANY MARKETING AND ITS ALLIED ENTITIES. Company Registration and Monitoring Department, the Corporate Governance Department for their information and appropriate action. published in a national newspaper of general circulation and furnished to the and Finance Department and the Economic Research and Information Let a copy of this Order be also posted in the Commission's website. are further directed to submit a formal compliance report, by way of a pleading. to the Commission En Banc within ten (10) days from receipt of this Cease and Desist Order. The EIPD and/or the Extension Office who served and posted this order 2016 Rules of Procedure of the Commission, the parties subject of this Cease and Desist Order may file a request for the lifting thereof within five (5) days from receipt hereof. In accordance with the provisions of Sec. 64.3 of SRC and Sec. 4-3 of the 5 FAIL NOT UNDER PENALTY OF LAW. SO ORDERED. Pasay City, Philippines, 04 June 2019 EMILI6B[AQUINO Chairperson U htawo dotwa. ANTONIETA F. IBE EPHYRO LUIS B.AMATONG Commissioner Commissioner 0 JAVEY PAUL D. FRANCISCO KELVIN LESTER K.LEE Commissioner Commissioner * On Leave 6