JUNE 10, 2024

Ito ang araw kung saan ay nagulat, kinabahan at natakot ang lahat dahil sa “Revocation Order” na inilabas ng Securities and Exchange Commission (SEC) sa kumpanyang SEATAOO o sa New Seataoo Corporation. Isa sa mga nakarating na reklamo sa SEC ay isa diumanong investment company ang Seataoo. Base sa mga nagpadala ng mga kanilang reklamo ay inisip ng SEC na ito daw ay gumagawa o nagpapatupad ng PONZI-like scheme na isa sa mga ipinagbabawal.

THE Securities and Exchange Commission (SEC) has revoked the registration of New Seataoo Corp. and Seataoo Information Technology OPC and imposed a P1-million fine for unauthorized investment activities. In a May 10 order, the agency’s Enforcement and Investor Protection Department (EIPD) said that Seataoo was soliciting investments from the public without the required license, in violation of the Securities Regulation Code (SRC). Seataoo, registered as two separate entities, was said to have advertised itself as a cross-border e-commerce platform offering a drop-shipping business model.

However, the SEC said that it was actually a Ponzi-like scheme where investors were promised profits primarily from the efforts of other people. The EIPD’s investigation revealed that the company’s operations involved elements of an investment contract, which required prior registration and approval from the commission.

The agency also said it had received numerous complaints against Seataoo since last year for requiring sellers to pay for products upfront, which were then marketed as investments rather than retail transactions. Despite a show cause order issued on March 22, 2024, Seataoo denied the allegations, claiming that its business operations were legitimate and its sellers were not investors.

The regulator concluded that the money paid by sellers comprised capital investments used in a common enterprise with the expectation of profits derived from Seataoo’s efforts. “Seataoo’s activities went beyond the powers conferred by its Articles of Incorporation and involved serious misrepresentation to the great prejudice of the investing public,” the SEC said in its order.

DEFINITION OF SEC TO INVESTMENT

The Securities and Exchange Commission (SEC) of the Philippines doesn’t provide a general definition of “investment” itself. However, their focus lies in regulating investment companies and securities.

Here’s what we can glean from their perspective:

Securities can include stocks, bonds, treasury bills, and other financial instruments.

While the SEC doesn’t offer a broad definition of investment, their focus on investment companies offers insight into how they view investments – as the allocation of resources towards securities for financial gain.

Investment companies, as mentioned in the attached PDF, generally work by pooling money from multiple investors to purchase a diversified portfolio of securities. These companies can be classified into different types, each with its own investment strategy and goals. Here are the key elements that define how these investment companies operate and are considered as investment companies:

  1. Pooling of Funds:
    • Investment companies collect funds from individual investors. This pooled capital is then invested in a variety of securities such as stocks, bonds, money market instruments, and other assets.
  2. Diversification:
    • By pooling funds, investment companies can achieve diversification, spreading investments across various assets to reduce risk. This is particularly advantageous for individual investors who might not have enough capital to achieve such diversification on their own.
  3. Professional Management:
    • These funds are managed by professional portfolio managers who make investment decisions based on research, market conditions, and the fund’s investment objectives.
  4. Types of Investment Companies:
    • Open-end Funds: Also known as mutual funds, these do not have a fixed number of shares. They issue and redeem shares at the fund’s net asset value (NAV) based on the current market value of the fund’s assets.
    • Closed-end Funds: These funds issue a fixed number of shares and are traded on stock exchanges. Their price can vary from the NAV based on supply and demand.
    • Unit Investment Trusts (UITs): These hold a fixed portfolio of securities and have a set end date.
    • Exchange-Traded Funds (ETFs): Similar to mutual funds, but traded on stock exchanges like closed-end funds.
  5. Regulation and Compliance:
    • Investment companies are regulated to ensure transparency, protect investors, and maintain fair market practices. They must comply with the Securities Regulation Code and other relevant regulations.
  6. Types of Funds:
    • Equity Funds: Invest primarily in stocks.
    • Fixed Income/Bond Funds: Invest in bonds and other debt instruments.
    • Balanced Funds: Invest in a mix of equities and bonds.
    • Money Market Funds: Invest in short-term, high-quality investments issued by government and corporate entities.
    • Feeder Funds: Invest in shares of another mutual fund.

Here are some examples from the attached document:

  1. Affinity Global Multi-Asset Fund, Inc.: An open-end multi-asset fund that invests in a diverse range of assets to balance risk and return.
  2. AIB Money Market Mutual Fund, Inc.: An open-end money market fund focused on short-term debt instruments.
  3. ALFM Dollar Bond Fund, Inc.: An open-end fixed income/bond fund investing in dollar-denominated bonds.
  4. ATRAM Alpha Opportunity Fund, Inc.: An open-end balanced fund investing in both equities and fixed income securities.

Each fund listed operates under the principles of pooling investor money, professional management, diversification, and adherence to regulatory standards, ensuring they meet the criteria of being investment companies​​.

LETS DISCUSS THE CONTENT OF THE REVOCATION ORDER

The primary and secondary purposes of SEATAOO INFORMATION TECHNOLOGY OPC as stated in its Articles of Incorporation, is

Primary:

“To operate, manage, and engage in the business of data processing, web hosting and related activities by providing infrastructure for these activities as well as provision of search facilities and other portals activities for the internet. Subject to the provision of Data Privacy Act of 2012 (RA 10173).

Secondary:

“To engage in the business of software development, trading, e- commerce, retail and services.

The primary purpose of NEW SEATAOO CORPORATION as stated in its Articles of

Incorporation, is

The company will engage in e-commerce retail business”

As advertised on social media (Facebook, Youtube), NEW SEATAOO CORPORATION and SEATAOO INFORMATION TECHNOLOGY OPC “collectively herein SEATAOO” is a cross-border e-commerce that features a “Dropshipping Platform” and provides a seamless and secure online shopping experience to customers worldwide. SEATAOO offers its services by accommodating sellers to have their own shop by using Seataoo’s platform of Application where a seller can manage and monitor his/her own shop.

In the month of April 2023, the Commission began receiving inquiries and information from the public that individuals or group of persons representing an entity named “SEATAOO” was soliciting and/or collecting money from the public in the form of investments.

 

NA-SCAM KA BA NG SEATAOO?

Ito na ang pagkakataon ng maraming nag-aakusa upang ikwento kung paano sila na Scammed at bakit nila sinabing Investment ang Seataoo. This Article is your opportunity to voice out and reveal the truth.

New Seataoo Corporation, a company recently scrutinized and penalized by regulatory authorities, has been labeled an investment company due to its operational practices. Despite its formal classification as an information technology and e-commerce business, the company allegedly engaged in activities characteristic of investment scams. Complainants are encouraged to share their experiences and provide evidence to substantiate their claims. Below are three illustrative paragraphs based on hypothetical scenarios inspired by common issues in similar cases:


Paragraph 1: Investor Recruitment and Promised Returns

Several complainants have reported that New Seataoo Corporation lured them into investing substantial amounts of money with promises of high returns. The company portrayed itself as a legitimate business offering investment opportunities through a sophisticated online platform. Investors were told they could earn significant profits by participating in what was described as a “dropshipping platform” that required initial capital. The promise of easy and lucrative returns enticed many individuals to part with their savings, expecting the returns to be managed and disbursed by the company.

Paragraph 2: Lack of Transparency and Misrepresentation

As time passed, investors began noticing discrepancies between the promised returns and the actual profits they received. Many reported that the company provided little to no transparency regarding how their money was being utilized or the specific operations generating the promised returns. Attempts to access detailed reports or contact customer service were often met with vague responses or complete silence. The initial excitement and trust turned into suspicion and frustration as investors realized that the company’s communications were filled with misrepresentations and that the business model was not as robust or legitimate as initially portrayed.

Paragraph 3: Evidence of Financial Irregularities and Legal Action

Complainants have shared various forms of evidence indicating that New Seataoo Corporation engaged in financial irregularities. Bank statements, transaction records, and email correspondences reveal a pattern of delayed payments, unfulfilled promises, and outright refusal to return invested capital. Some investors provided screenshots of the company’s online platform showing manipulated investment figures and fictitious buyer transactions. These pieces of evidence have formed the basis of multiple complaints to regulatory bodies, culminating in the company’s classification as an investment company operating without proper authorization and engaging in fraudulent activities. The complainants call for justice, hoping that their stories will prevent others from falling victim to similar schemes and that regulatory actions will hold the company accountable.


These paragraphs aim to encapsulate the types of stories and evidence that complainants might present to demonstrate how they were scammed by New Seataoo Corporation and why it is viewed as an investment company.