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Tuesday, May 21, 2024

Iloilo-based salon ordered to stop selling securities

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The Securities and Exchange Commission (SEC) said Friday it issued an advisory against Salon de Pamplona, an Iloilo-based salon allegedly found to be offering securities without the necessary licenses.

It said in an advisory dated Dec. 20 Salon de Pamplona was not authorized to sell or offer securities under the Securities Regulation Code (SRC).

The group, which has nine branches in the region, was found to be offering investment slots worth P5,000 to P300,000, in exchange for a promised return of 15 percent after 30 days.

Proceeds from the investments will supposedly fund the expansion of its salon branches, it said.

Salon de Pamplona is not registered with the SEC either as a corporation or partnership, the agency said.

It was also not authorized to solicit investments from the public and had not secured the prior registration or license from the commission, according to the SEC.

“[T]he investment scheme of Salon de Pamplona has the characteristics of a ‘Ponzi scheme’, promising exorbitant rates of return with little to no risk at all to the investors… The commission will not issue a license to offer or sell securities to the public, to persons or entities engaged in such business or scheme,” the advisory read.

The SRC provides that entities seeking to engage in the business of buying or selling securities or as a broker dealer, or seeking to create or operate an exchange for the buying and selling of securities, should secure a secondary license with the SEC.

The SEC also warned that those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers and enablers of Salon de Pamplona in selling or convincing people to invest in its platform within the Philippines, even through online means, might be held criminally liable under Section 28 of the SRC and might be penalized up to P5 million or suffer imprisonment of up to 21 years, or both.

The SEC earlier issued an advisory against Salon de Alexis, another Iloilo-based salon for employing a similar investment scheme.

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