THE Securities and Exchange Commission (SEC) has ordered the closure of Forsage and Forsage Philippines for activities involving the illegal solicitation of investments.
In a statement Wednesday, the corporate regulator said it issued a cease-and-desist order to Forsage on Sept. 17, ordering it to stop selling securities to the public in the form of investment contracts.
The company was also prohibited from using funds from its depository banks to preserve the assets it took from investors.
The SEC first issued a warning to the public against engaging with Forsage in June, noting it received several complaints about the group’s investment activities. At the onset, the SEC said Forsage was not a registered business with the commission.
It found through its investigation that Forsage invites investors to take part in a crowdfunding platform that uses blockchain technology. Through selling commission programs, the group promises passive income to investors.
However, the SEC said Forsage’s income relies on the membership fees it collects from investors, which makes it unsustainable. Its activities are also unauthorized, as the selling of securities is regulated by the SEC.
“Forsage is not registered…, nor has it been issued a secondary license to operate as a broker dealer of securities or issuer of any securities or of mutual funds,” the SEC said.
Despite the warning of the SEC in June, the company continued to operate, hence the decision of the regulator to issue a cease-and-desist order.
“[T]he investment practices of Forsage, if not restrained, will operate as a fraud on investors or to the investing public as it utilizes a ‘Ponzi scheme’,” the SEC said.
“It is not an investment strategy but a gullibility scheme, which works only as long as there is an ever increasing number of new investors joining the scheme,” it added.
Forsage is the latest in the SEC’s list of unauthorized investment operators ordered to shut down this year. The others are Fast Track Worldwide, Inc.; JOCALS688 Beauty and Wellness Products Trading, Inc.; Building Our Success Stories Network, Inc.; CROWD1 Asia Pacific, Inc.; Lion City Finance Group, Inc.; and Payasian Pte. Ltd. Corp. — Denise A. Valdez