The Securities and Exchange Commission (SEC) has ordered Humanitarian and Spiritual Mission Apostulates of Davao and Asia Inc., HASMADAI Foundation Inc., and Humanitarian Institute of Technology Corp. (collectively HASMADAI) to stop their unauthorized solicitation of investments.

In a cease and desist order (CDO) order promulgated on May 21, the Commission En Banc directed the group to immediately cease and desist from offering or selling securities to the public without the necessary license from the SEC.

The commission also directed the group to cease its online presence. It prohibited transacting any business involving funds in its depository banks and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets of its investors.

The order covers the officers of the group, along with all other officers, directors, representatives, salesmen, agent, brokers, dealers, promoters, recruiters, uplines, influencers, endorsers, abettors and enablers are likewise enjoined to comply with the order.

The order was issued after the SEC Enforcement and Investor Protection Department found the group to be operating several branches in the CARAGA Region that supposedly offered investments in the guise of missionary allowances.

The group was found to be soliciting donations ranging from P5,000 to P20,000, with the donor guaranteed to get a monthly “missionary allowance” equivalent to 27 percent to 34 percent of the donation.

Under the scheme, a donor of P5,000 is guaranteed to receive P8,100 over a six-month period, while a donor of P20,000 will get more than twice the amount at P41,400.

One of its officers was also found to be previously connected with KAPA-Community Ministry International, Inc., one of the largest investment scams in the country’s history, which is currently being prosecuted by the SEC before the courts.

The scheme involved the sale and/or offer of securities in the form of investment contracts, whereby a person makes an investment of money in a common enterprise with the expectation of profits to be derived solely from the efforts of others, the Commission held.  

HASMADAI is a non-stock, non-profit religious society registered with the SEC, while HASMADAI Foundation Inc. and HASMADAI Institute of Technology Corp. are neither registered as a corporation or as a partnership with the SEC.

Accordingly, none of the entities have secured the necessary license to solicit investments from the public.

Records from the Department of Social Welfare and Development further show that HASMADAI does not have the requisite approval to carry out a public solicitation activity.

The unauthorized investment scheme of HASMADAI also constitutes financial fraud as defined under the Financial Products and Services Consumer Protection Act, which covers any form of deceptive solicitation of investments from the public.

“[T]he act of HASMADAI and its agents in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the Commission held.

It added that “verily, HASMADAI’s act of offering/selling unregistered securities in the form of investment contract sans the required license constitutes a clear and continuing violation of Sections 8 and 28 of the SRC. This justifies the immediate issuance of a CDO for the protection of the investing public.”