The SEC issued an advisory to the public against investing in LION CITY FINANCE GROUP, INC. (LION CITY). The full text of the advisory reads:
In response to numerous reports and inquiries received by the Commission regarding the activities of LION CITY FINANCE GROUP, INC. (LION CITY), the Commission wishes to inform the public that LION CITY is not authorized to solicit investments from the public since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the Securities Regulation Code (SRC).
To quote the pertinent portion of LION CITY’s Articles of Incorporation, it provides that:
“That the primary purpose for which such corporation is incorporated:
To engage in the business of a financing company by extending credit facilities for any legal purpose to consumers and to industrial, commercial and/or agricultural enterprises, by direct lending, secured or unsecured, by discounting of factoring commercial papers or accounts receivable, by sales finance, by buying and selling contracts, lease, chattel mortgage or other evidence of indebtedness, or by financing or operating leasing of movable and immovable property, and real estate mortgages; money market trading operations; and, in furtherance of the above purposes, to undertake the collection of commercial papers, accounts receivable, negotiable instruments, letters of credit and other evidence of indebtedness.
Provided that the corporation shall not solicit, accept or take investments/placements from the public neither shall it issue investment contracts.”
It must be noted that acquiring a primary registration with the Commission as a financing company is not a license or authority to solicit investment from the public because it only grants juridical personality to the corporation and to operate within its purpose only but does not authorize it to issue, sell, or offer securities for sale nor to undertake investment activities without acquiring a prior registration and/or secondary license approved by the Commission.
Based on the information gathered by the Commission, LION CITY offers a pure passive income of Ten Percent (10%) interest or more per month supported by a Notarized Memorandum of Agreement and Investment Contract and secured with postdated checks.
These investments shall be used allegedly for real estate, foreign exchange, casino financing, and buying and selling cars among others, that are not within the purpose by which LION CITY was established.
The public is advised to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of LION CITY or any entities engaged in solicitation activities guised as financing companies.
Those who act as salesmen, brokers, dealers or agents of LION CITY in selling or convincing people to invest in the investment scheme being offered by these entities including solicitations and recruitment through the internet may likewise be prosecuted and held criminally liable under Section 28 of the SRC and penalized with a maximum fine of Five Million pesos (P5,000,000.00) or penalty of Twenty-one (21) years of imprisonment or both pursuant to Section 73 of the SRC. Also, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public may incur criminally liability, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of Securities and Exchange Commission vs. Oudine Santos (G.R. No. 195542, 19 March 2014).
Furthermore, the names of all those involved will be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be correspondingly assessed.
Should you have any information regarding any investment solicitation by any individuals or group of individuals representing LION CITY, please call the Enforcement and Investor Protection Department (EIPD) at telephone number (02) 8818-6047 or send your report to the EIPD at [email protected]
For the guidance of the public.
Pasay City, 22 October 2019