The Securities and Exchange Commission (SEC) has cancelled the corporate registration of MCM Royalty Legacy International Inc. for illegally soliciting investments from the public.
In an order issued by the SEC’s Enforcement and Investor Protection Department, regulators found that the company offered securities without securing the required registration and license from the SEC. As a result, the firm’s corporate registration was revoked.
The SEC also imposed a P1 million fine on the company and its president, officers and directors. In addition, the officials were disqualified from serving as directors of any corporation for five years.
According to its articles of incorporation, MCM Royalty was engaged in wholesale trading, with secondary activities in online advertising and e-commerce. However, the SEC said the company was not authorized to solicit investments or issue investment contracts to the public.
The regulator’s investigation showed that the company sold investment contracts disguised as franchise agreements tied to supposed businesses such as travel and tour ticketing, bills payment, e-loading services and wellness products. Investors were promised guaranteed profits depending on the package purchased.
The SEC said the scheme resembled a Ponzi scheme, where returns paid to earlier investors come from the contributions of new investors rather than legitimate business profits.
In its order, the SEC said the company misled the public by creating the impression that it had authority to deal in securities, calling the scheme a serious misrepresentation that harmed investors.
Corporate significance: The cancellation of registration effectively dissolves the company’s legal authority to operate as a corporation, reinforcing the SEC’s crackdown on firms that raise funds from the public without proper registration and licensing.
