The Securities and Exchange Commission (SEC) has taken decisive action against F2M Agri-Farm OPC, revoking its incorporation and imposing a hefty P1 million fine on the company and its incorporators for soliciting investments without the proper regulatory approvals. The commission also penalized Martin Agustin and nominee John Lopez for their role in the scheme.
F2M Agri-Farm OPC, along with its network of related entities including branches across Tarlac, Tuguegarao, Dagupan, and other provinces, was found offering unregistered securities through a program called the “F2M 3-month Paalaga System.” The scheme enticed investors to buy piglets at P5,000 each, promising a guaranteed return of P2,600 for each piglet after three months, minus a 5 percent service charge.
The SEC’s investigation revealed that the program was structured as an investment contract, where participants invested money in a common enterprise with the expectation of profits primarily derived from the efforts of others. Under this arrangement, investors were told they could earn a return of 52 percent on their investments. A P100,000 investment in 20 piglets would yield P52,000 in three months, for example.
The SEC, however, flagged the operation as an illegal investment scheme, identifying it as a potential Ponzi structure, where payouts to investors came from the funds of new investors rather than legitimate business activities. “The scheme does not have any underlying legitimate business that could support its promised returns,” the SEC noted in its ruling.
Additionally, the SEC said F2M Agri-Farm OPC was not authorized by its franchise to offer or sell securities, nor was it permitted to raise capital from the public. These activities were deemed “ultra vires” (beyond the powers) and a serious misrepresentation of the company’s legal standing.
The revocation of F2M Agri-Farm’s registration and the accompanying fine underscore the SEC’s commitment to protecting investors from unregistered and potentially fraudulent schemes. This case serves as a stark reminder that businesses must adhere to strict regulatory standards when soliciting investments from the public.
