The Securities and Exchange Commission (SEC) has made permanent the order stopping AlphanetWorld Corporation, which has been doing business under the name NWorld, from soliciting investments from the public without the necessary license.
In a resolution dated July 19, the Commission En Banc denied for lack of merit AlphanetWorld’s motion to lift the February 23 cease and desist order (CDO) issued against the company for its unauthorized solicitation, offer and/or sale of securities.
In its motion to lift the CDO, AlphanetWorld argued that the purchase of its products and packages are plain sales transactions, in contrast to the SEC Enforcement and Investor Protection Department’s finding that it has engaged in the sale of securities.
“The evidence presented by NWorld in support of its allegations and arguments therein simply failed to trounce the finding of this Commission that NWorld is engaged in the sale of securities in the form of investment contract, and is in continuous violation of Section 8 of the [Securities Regulation Code],” the Commission En Banc held.
The SEC issued the CDO against AlphanetWorld and its officials, including President Julius Allan C. Nolasco, after finding that the company has been selling and/or offering investment packages priced from P4,750 to P19,000 in exchange for NWorld products and a guaranteed monthly return of up to P127,000. Business transactions are supposedly made through the company’s official webpage.
Member-investors could also earn discounts of up to 30% for every purchase of NWorld products, referral bonuses, and an additional P25,000 when they meet the 25 pairs of recruits.
The scheme involves the sale and offer of securities to the public in the form of investment contracts, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC.
Section 8 of Republic Act No. 8799, or the SRC, provides that 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 SEC.
“NWorld is unlawfully engaged in the sale and/or offer of unregistered securities in the form of investment contract, because it has no license to carry out the same,” the Commission En Banc held.
While AlphanetWorld is a duly registered corporation, it has never secured a secondary license from the Commission as issuer of securities or broker dealer nor registered any securities for public offering pursuant to the SRC.
“The Commission holds that the act of NWorld in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the order read.