The Securities and Exchange Commission has issued a cease and desist order against Platinum Coin Pawnshop, a company based in Dipolog City, for ostensibly operating an investment scheme in the guise of a lending company.
In an order, the agency directed Platinum Coin to cease and desist at once from further engaging in the unlawful solicitation, offer and sale of securities in the form of investment contracts without a license from the SEC.
It has determined the enterprise flourished for a while on the basis of a Department of Trade and Industry authority to engage in dishwashing liquids.
The agency also prohibited the company from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets of its investors. The company was likewise ordered to cease its internet presence relating to its investment scheme.
The order covers Platinum Coin’s operators, directors, officers, representatives, salesmen and agents.
Platinum Coin represents itself as an entity engaged in a legitimate lending business in Dipolog City, Zamboanga del Norte. It ostensibly offers and extends loans to the public with an interest rate of 20 percent for a 60-day exposure, with payment collection made on a daily basis.
The SEC’s Enforcement and Investor Protection Department found the company to have enticed the public to invest anywhere from P1,000 to P650,000, with the promise of 15 percent to 50 percent guaranteed returns within 30 days. Platinum Coin then executes an agreement with its investors and issues post-dated checks.
Investors are also promised an annual bonus of 20 percent of their investment, plus a 5 percent commission for new recruits.
The scheme involves the sale and offer of securities to the public in the form of investment contracts, in which one invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC.
The agency said the post-dated checks issued by Platinum Coin fall within the definition of securities in the form of “evidence of indebtedness.”
“The commission thus finds and so holds that the post-dated checks were issued to its investors in lieu of shares or interest in Platinum Coin in an attempt to circumvent the law. The post-dated checks represent the investor’s ownership interest in the lending business of Platinum Coin with an expectation of profits to be derived therefrom,” according to the SEC.
Platinum Coin is not registered with the SEC, either as a corporation or partnership. An entity called Platinumcoin Consumer Goods trading under the name of Decenan is registered with the Department of Trade and Industry. However, it is only authorized to conduct business activities related to dishwashing liquids.
Platinum Coin has never secured a secondary license as issuer of securities, neither as broker dealer nor registered any securities for public offering pursuant to the Securities Regulation Code.
The SEC has issued an advisory warning the public not to invest in Platinum Coin as early as February 10, 2023.
“[The] commission cannot overemphasize the fact borne by the records that Platinum Coin’s act of selling/offering unregistered securities in the form of investment contracts constitutes fraud which should be promptly restrained for the protection of the investing public,” the SEC’s said.
