In other news, the Securities and Exchange Commission (SEC) in the Philippines has also revoked the corporate registration of Cyfle OPC. The commission stated this action was taken because the company solicited investments from the public without holding the necessary authorisation.

In an order dated May 16, the SEC’s Enforcement and Investor Protection Department (EIPD) cancelled Cyfle’s registration. The SEC found that Cyfle OPC violated the Revised Corporation Code by operating beyond the powers granted in its articles of incorporation (AOI).

Although its primary purpose, stated during its 2022 incorporation, was management consultancy, the investigation revealed Cyfle was offering investments. This contradicted its AOI, which explicitly prohibited soliciting or accepting investments.

The investment programme reportedly promised investors a 30% return on a minimum placement of P50,000 for a one-year term. The SEC order noted that Cyfle used agents and social media to invite public investment. The commission found this constituted an unauthorised public offering of securities.

Furthermore, the SEC indicated that the investment structure resembled a Ponzi scheme, sourcing returns for early investors from new investors’ payments. Such schemes are prohibited under the Securities Regulation Code. The SEC stated that this activity aimed to defraud investors by misrepresenting the company’s authority to handle securities.

Consequently, the SEC imposed a PHP 1 million fine for the unauthorised securities offering. An additional PHP 1 million in administrative sanctions was levied against Cyfle and its principal officers. The SEC had previously issued a public advisory regarding Cyfle’s activities in July 2024.

Featured image by Mitriakova Valeriia on Freepik.