The Securities and Exchange Commission (SEC) has permanently upheld the cease and desist order (CDO) against Casa Infini Builders and Realty Co. Ltd., Casa Infini Realty Management Co. Ltd., and their affiliated entities due to a Ponzi-like scheme and the unlawful sale of securities without the required license.
The Commission en banc issued the CDO against Casa Infini on June 8, subsequent to findings by the SEC Enforcement and Investor Protection Department (EIPD) that the company and its officers were illicitly vending securities in the form of investment contracts.
Casa Infini lured the public into investing in purported real estate projects in Baguio City, either as buyer-investors or partner financiers. Investors were promised a guaranteed income of over P33,000 per month for 20 months, with the company asserting that the collected investments were financing the real estate properties it purportedly owned, managed, and operated.
Section 8 of Republic Act No. 8799, the Securities Regulation Code (SRC), explicitly prohibits the sale or offer to sell and/or distribution of securities without the proper secondary license from the SEC.
In a bid to lift the CDO, Casa Infini argued that investor solicitation was not a scam as its project held a license from the Department of Human Settlements and Urban Development.
The group vehemently denied being a Ponzi scheme, contending that referral fees were paid by CI Builders itself, not by the investments of new partners. Casa Infini emphasized that this payment was a result of the acknowledged benefits the program would bring to the business.
The Commission en banc, however, maintained its position. “Consistent with the broad definition of securities, the term investment contract should include and cover all forms and varieties thereof which are known or considered, or ought to be known or considered to be such, in the financial world,” the Commission en banc said.