The Department of Justice (DOJ) has indicted two top officers of Cebu-based Fergus, Inc. for allegedly soliciting investments from the public without the necessary licenses.
The Securities and Exchange Commission (SEC) said the DOJ upheld its findings and found prima facie evidence to charge Fergus president Jefferson Acas Jr. and corporate secretary and chief finance officer Rosemarie Mayorga with violating Sections 8, 26 and 28 of Republic Act (RA) 8799, or the Securities Regulation Code (SRC), in relation to Section 6 of RA 10175, the Cybercrime Prevention Act.
State prosecutors also recommended filing criminal charges against Acas and Mayorga for violating Section 11, in relation to Section 3(f), of RA 11765, or the Financial Products and Services Consumer Protection Act (FCPA), also in relation to Section 6 of the Cybercrime Prevention Act.
The case stemmed from a National Bureau of Investigation (NBI) probe initiated after a request from Padlan Salvador & Associates on behalf of Australian clients who claimed they were defrauded by the company.
The NBI later sought assistance from the SEC, which determined that Fergus was offering securities in the form of investment contracts through an automated trading software.
“Respondents Mayorga and Acas represented that they market a set of e-books or materials that included a software but there was no proof of said e-books or materials,” the resolution stated.
“Instead, Fergus operated as a business process outsourcing entity to encourage customers to earn passive income through an automated trading machine which supposedly has the capability to assess the different financial markets and make the best trading decisions for the customers without them having to do the trading themselves for a minimum investment amount of $250,” it added.
Section 8 of the SRC prohibits selling securities without a registration statement approved by the SEC, while Section 28 requires persons engaged in the business of buying or selling securities to be registered with the commission. Section 26 makes it unlawful to employ any device or scheme to defraud, obtain money or property through untrue statements or omissions, or engage in any act that would operate as fraud or deceit.
While Fergus was a duly registered corporation with the SEC engaged in providing business process outsourcing services particularly in generating sales and marketing support to clients abroad, its articles of incorporation specifically prohibited the company to accept or take investments/placements from the public and issue investment contracts.
