July 7, 2013 7:24 pm [ Manilatimes.net ]
by MADELAINE B. MIRAFLOR
The Securities and Exchange Commission (SEC) has filed a cease and desist order against Philippine Landgroup Inc. (PLGI), a real-estate company victimizing citizens with its “owning your own hotel room scam.”
In an order, SEC said that its enforcement and prosecution department (EPD) found out through a series of investigation that PLGI is offering unregistered security investments to the public through one of its real-estate projects, the Grandview Tower Condotel located in Angeles City.
PLGI is allegedly encouraging investors to buy and purchase their own hotel room in Grandview Tower and will then be asked to pay P50,000 for the initial paperwork and reservation fee.
By purchasing a unit, the buyer will then be required to enter into a management agreement with Grandview Property Management Inc., wherein the unit bought is pooled together with the units purchased by other buyers and operated as hotel enterprise.
The EPD of the commission further uncovered the fact that the price list of units being sold by PLGI and the announcements regarding the Grand Tower Hotel Vacation Club are being posted in social networking site Facebook.
According to the SEC, the overall investment scheme which is being aggressively offered and sold by PLGI has the elements of an investment contract, a form of security which must be registered with the commission before it is sold to the public.
The acts of PLGI in “soliciting sales undoubtedly fall under the definition of public offering,” SEC specified. However, the company failed to “secure the registration of subject of securities with the commission.”
“PLGI and its salesmen must also secure a secondary license to act as broker-dealer or salesmen or associate persons thereof in securities, but they have not complied with the mandatory requirement. Thus, it is necessary that a cease and desist order be issued to enjoin the company from further offering and selling securities to the public,” the SEC cited in its ruling.
“Otherwise, allowing PLGI to continue its business operations will operate as a fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public,” it added.