THE Securities and Exchange Commission (SEC) has lately been warning about the risky practice by some Filipino investors of doing business with foreign corporations, merchants or entities which are not registered and licensed to do business in the country.
The law requires these firms to list and apply for a primary registration with the SEC before soliciting customers or business here.
Because of the proliferation of internet-based businesses, unsuspecting Filipinos sometimes fall victim to the aggressive marketing schemes of these companies, many of which offer financial products and investment packages.
You can see their ads in popular social media here such as Facebook.
It is easy to apply and make an account with these foreign entities, and they sometimes ask for your credit card details and personal circumstances, which should remain private and if leaked can be used in various nefarious activities by criminal syndicates in cyberspace.
In a statement, the SEC said: “The public is reminded to be vigilant and to do their due diligence prior to transacting/dealing with any entity. The public is also advised to avoid transacting with corporations or entities without any registration or license to do business in the Philippines in order to avoid losing their earnings.
“If an entity or an activity is unlicensed or unregistered and is based abroad, you run the risk of not getting your money back once these are transmitted outside of the Philippines.”
The SEC should be cited for doing its work in the case of waving the red flag on these dubious Ponzi schemes and marketing networks, especially those based abroad.
This is because the laws of foreign countries, and not our laws, will apply in case of criminal complaints filed in connection with these transactions.
While we appreciate SEC's policy and action in this regard, we, however, call out this agency for seemingly forgetting or delaying action on several issues in the Philippine Stock Exchange that also erode the confidence of the investing public in our local bourse.
More on this in our next column.
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