In a significant move towards protecting the investing public, the National Telecommunications Commission (NTC) has taken decisive action by ordering the blocking of access to the website and app of the foreign exchange platform, MiTrade. The Securities and Exchange Commission (SEC) accused MiTrade of offering investment opportunities without the necessary license, marking a crucial step in the ongoing battle against illegal investment schemes.
Collaborative Efforts
SEC Chairman Emilio Aquino expressed gratitude to the NTC for their support in the campaign against investment scams and predatory financial schemes. This collaborative effort aims to safeguard the interests of investors and create a more secure financial environment. The SEC played a pivotal role in bringing MiTrade's illegal operations to the attention of the NTC, highlighting its violation of the Revised Corporation Code of the Philippines.
MiTrade's Illicit Activities
MiTrade came under scrutiny when the SEC observed its active promotion on various social media platforms, targeting Filipinos and enticing them to participate in investment and trading activities. Further investigation revealed that MiTrade's operators, purportedly registered brokers and dealers overseas, were offering securities and investments without the requisite approvals.
Legal Violations
The Securities Regulation Code in the Philippines mandates the prior registration of securities with the SEC for public offering. This registration process includes providing comprehensive information about the securities, such as issue price, use of proceeds, and the nature of the securities. Companies issuing securities are also required to obtain a license from the SEC to sell or offer securities to the public.
MiTrade's operator, however, failed to register as a corporation in the Philippines, operating without the necessary license to engage in the sale or offering of securities, act as a broker or dealer, or operate an exchange within the country.
Advisory and Criminal Liability
In September 2023, the SEC issued an advisory warning the public against transacting with MiTrade. Additionally, a stern warning was issued to individuals acting as salesmen, brokers, dealers, agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of MiTrade. Such individuals may be held criminally liable under the Securities Regulation Code, with penalties including a maximum fine of P5 million and/or imprisonment of up to 21 years.
The NTC's move to block access to MiTrade's platform is a crucial step in curbing the proliferation of illegal investment scams. The collaborative efforts between the NTC and SEC demonstrate a commitment to protecting investors from fraudulent activities. As the regulatory bodies continue working closely together, it is anticipated that similar actions will be taken against other platforms facilitating illegal investment-taking activities and predatory financial schemes in the future. Investors are urged to exercise caution and verify the legitimacy of investment opportunities before participating in any financial transactions.
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