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Investment Scams in the Philippines: Legal Insights and Investor Safeguards

Writer's picture: Yasser AureadaYasser Aureada


The recent controversy involving a skincare company, Dermacare, and its alleged investment scam has captured public attention. Adding to the confusion is the involvement of celebrities like Rufa Mae Quinto and Neri Naig-Miranda, who endorsed the brand. Many are now questioning whether endorsers can be held accountable for promoting such ventures.

To clear the air, let’s explore the legal aspects of investment scams in the Philippines, the liabilities of endorsers and investors, and the steps you can take to protect your hard-earned money.



What Philippine Law Says About Investment Scams

Investment scams, such as the one allegedly operated by Dermacare, violate several provisions under Republic Act No. 8799 or the Securities Regulation Code (SRC):

  1. Unregistered Investment OfferingsCompanies offering investments must secure proper registration from the Securities and Exchange Commission (SEC). Dermacare reportedly failed to meet this requirement, rendering its investment products illegal under Section 8 of the SRC.

  2. Fraudulent PracticesSection 26 of the SRC prohibits fraudulent schemes designed to deceive investors. Promises of high returns with little to no risk are classic indicators of such scams.

  3. Liability of EndorsersAccording to the SEC, endorsers, agents, or brokers of unregistered securities may face legal consequences if they are proven to have knowingly promoted these schemes. While celebrities like Rufa Mae Quinto and Neri Naig-Miranda may claim that their involvement was limited to endorsements, they could still be scrutinized if their actions contributed to misleading investors.



Learning from the Dermacare Controversy

The Dermacare case highlights the importance of due diligence—both for investors and endorsers. Here are some valuable lessons:

  1. Verify SEC RegistrationAlways check if the company and its investment products are registered with the SEC. Legitimate companies comply with this requirement to ensure transparency.

  2. Beware of High-Return PromisesBe cautious of investments guaranteeing excessive or risk-free returns. Such claims are often too good to be true.

  3. Scrutinize the Company’s Track RecordResearch the people behind the company. Are they experienced professionals with a proven track record?

  4. Evaluate EndorsementsWhile celebrity endorsements can make a company appear credible, remember that they are not guarantees of legitimacy. Endorsers may not always have the expertise to evaluate the ventures they promote.

  5. Seek Expert AdviceBefore investing, consult financial advisors or legal experts who can provide unbiased assessments of potential risks.



Endorsers and Their Legal Accountability

The involvement of public figures like Neri Naig-Miranda and Rufa Mae Quinto has raised questions about the responsibility of endorsers in such schemes. While Philippine law does not outright penalize endorsers, their actions can lead to liability if they knowingly promoted fraudulent ventures or failed to perform reasonable due diligence.

This serves as a cautionary tale for all endorsers to ensure the legitimacy of the brands they associate with, as their influence can impact not only their reputation but also their legal standing.



What to Do If You Encounter a Suspected Scam

If you suspect you’ve encountered an investment scam, take these steps:

  1. Report to the SECFile a complaint with supporting evidence through the SEC’s official channels.

  2. Seek Legal RepresentationConsult a lawyer to explore your options for civil or criminal actions against the perpetrators.

  3. Spread AwarenessEducate yourself and others to prevent further victimization. Sharing information is one of the most effective ways to combat scams.



Protecting Your Investments: How We Can Help

At Aureada CPA Law Firm, we provide expert guidance to protect your financial interests. Our services include:

  • Legal assistance in dealing with investment scams.

  • Guidance on regulatory compliance to ensure your business adheres to SEC regulations.

  • Risk assessment for potential investments or partnerships.

Our team of experienced professionals is dedicated to safeguarding your financial future. Contact us today to learn more.


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