THE Securities and Exchange Commission (SEC) on Friday ordered the AA Castro Construction and Aggregates Trading company to stop offering and selling investments to the public through the use of a construction business.
The company and its officers have likewise been ordered to cease their internet presence relating to their investment scheme and were further prohibited from transacting any business involving funds in its depository banks, and from transferring, disposing or conveying any related assets.
In an order dated Aug. 30, 2022, the commission en banc directed the company, together with AA Castro Hauling Construction Management and Aggregates Trading OPC (ACHCMATO), its chief executive officer April Grace Calleja Castro, its employees and representatives to immediately stop from further engaging in the unlawful solicitation, offer and sale of securities in the form of investment contracts without the necessary license from the SEC.
The order was issued after it was found that AA Castro has been enticing the public to invest in its supposed construction business through public events, as well as through social media sites Facebook and YouTube.
The company promised the public around 30 percent to 40 percent returns every month for a minimum investment of P50,000. Payouts amounting to P4,400 to P4,700 were to be given weekly, taken from its supposed construction business that allegedly yielded P23.26 per 189 cubic meters of aggregates hauled.
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"It is clear that AA Castro and April Castro are not authorized to sell or offer investment contracts to the public without the requisite license from this commission," the commission en banc said in its decision.
In addition, AA Castro is not registered with the commission either as a corporation or as a partnership.
Meanwhile, ACHCMATO is a duly registered corporation with the SEC but has never secured a secondary license as the issuer of securities or broker-dealers nor registered any securities for a public offering pursuant to the SEC.
The commission en banc also pointed out that ACHCMATO's registration papers showed that the company only had P3 million in capitalization, which reveals the company will not be able to sustain its promised payouts to the public.
"Pay-outs for investors are financed from investments of new investors. This is a fraudulent scheme which will likely cause grave or irreparable injury or prejudice to the investing public," the order read.