The Securities and Exchange Commission has issued a cease-and-desist order against a financial services company endorsed by Filipino boxing icon and former Sen. Manny Pacquiao Sr.
The SEC ordered Trading Point Holdings Limited, operating as XM, XM Global Limited and XM Philippines, to immediately stop engaging in the unlawful offering and/or selling of securities without the necessary license from the commission.
The order also directed the XM Group’s officers, promoters, representatives, agents, influencers, subsidiaries and all persons acting on its behalf to cease their internet presence related to the investment scheme.
The SEC further barred the group from conducting any business involving funds in its depositary banks and from transferring or disposing of its assets, including bank deposits. This action is intended to prevent potential damage to investors and preserve assets.
The order followed an investigation by the SEC Enforcement and Investor Protection Department, which found the XM Group to be offering derivatives, foreign exchange shares and cryptocurrencies, among other products.
XM operates under its parent company, Trading Point, an international financial services firm that publicly offers and sells brokerage services through its website and app. Locally, it promotes its products through its XM Philippines Facebook and YouTube accounts.
Under its scheme, XM requires investors to open an account and deposit a minimum amount, depending on the chosen plan, before trading securities on its platforms. It also offers bonuses and cash rewards for referrals under its Friend Referral Program.
“The fact that XM has tapped and made available the local banks and e-wallets as its payment partners clearly shows that investors in the Philippines are primarily its target market,” the order read.
“Considering that XM was shown, by substantial evidence, to be offering/selling unregistered securities in the Philippines without the requisite license in violation of Sections 8 and 28 of the SRC, the issuance of a CDO is therefore warranted for the protection of the investing public, as it operates as a fraud on investors,” it added.
The SEC said the XM Group is not registered as a corporation or partnership with the agency and therefore cannot secure a secondary license to offer securities.
Section 8.1 of the Securities Regulation Code (SRC) requires securities to be registered with the SEC before being offered or sold in the Philippines. Section 28 prohibits any person from engaging in the business of buying and selling securities unless registered as a broker or dealer.
The SEC issued an advisory as early as March 2024 warning the public against investing in unregistered online investment platforms, including XM.
