THE Securities and Exchange Commission (SEC) has revoked the corporate registration of Seek Explore Sports Association, Inc. after finding it engaged in unauthorized investment activities.
In an order dated Dec. 22, the SEC’s Enforcement and Investor Protection Department (EIPD) said it canceled the company’s registration for violating Section 44 of Republic Act No. 11232, or the Revised Corporation Code (RCC), in relation to Sections 8.1, 26, and 28.1 of the Securities Regulation Code (SRC) and Section 6(i), paragraph 2 of Presidential Decree No. 902-A.
The RCC bars corporations from exercising powers beyond those set in their articles of incorporation (AoI).
The SEC also imposed a P1-million fine on the company for offering securities to the public without securing the necessary registration or license.
Seek Explore Sports Association, registered in November 2024, declared in its AoI that its primary purpose was to implement activities to improve community health, education, and productivity, facilitate contributions for association development and societal benefit, promote livelihood programs for elders, and conduct outreach programs in the community.
However, the SEC said its investigation found that the company had offered the sale of securities despite a clause in its AoI stating that its certificate does not authorize investment solicitation or investment-taking without a secondary license from the Commission.
“Despite its lack of authority, Seek Explore Sports Association Inc./Seek Explore Sports Business Association/Se Sports/Seek Explore Ltd./Se Sports Philippines And Sports Business Association enticed the public to invest in its supposed schemes which has the characteristics of a Ponzi Scheme where returns to early investors are likely to be paid out from the investments of new investors and not out of the corporation’s profits, with promise of ridiculous rates of return with little or no risk similar to those already flagged by the Commission as scams,” the order read.
According to the SEC, Seek Explore Sports Association promoted schemes promising high returns on unregistered “investment contracts,” taking investments from P500 up to P140,000 with claims that these could reach about P1.79 million in 150 days depending on the plan chosen by the investor.
“Furthermore, an investor can also earn up to 17% commission and up to 200 points,” it added.
The SEC found that the schemes of Seek Explore Sports Association and its related entities met all the elements of an investment contract: members of the public invested money, funds were pooled in a common profit-making enterprise, investors were promised earnings, and those profits were to come mainly from the efforts of others, with investors not involved in management and earning only by investing.
The SEC issued an advisory against Seek Explore Sports earlier this month, warning the public about the company’s unauthorized solicitation of investments. — Alexandria Grace C. Magno
