Have you been hit by ‘One Lightning?’

MANILA, Philippines – The Securities and Exchange Commission (SEC) is cracking down on one alleged pyramiding firm to another.

The latest to be hit is One Lightning Corporation, a Filipino-owned marketing company founded only in 2014. It is primarily engaged in the marketing of beauty, skin, and personal care products, food supplements, and healthy beverages.

One Lightning prides on a “unique and powerful distribution method designed to provide exceptional income opportunity to its distributors for both local and international market,” the firm stated on its website.

‘Modus operandi’

SEC, in its first advisory February 27, said that it did not issue a secondary license to One Lightning and its affiliates to publicly offer or sell securities or solicit investments from the public.

SEC noted that One Lightning’s “modus operandi” is to entice the public to invest in cosmetics and healthcare products. They would be rewarded with huge returns through a “revolutionary compensation plan that the company provides to its distributors, which consists of sharing 70% of the company’s profits to investors,” SEC stated in its advisory.  

“Those who participate in this investment-taking activity of One Lightning run the risk of being prosecuted for criminal violation of the Securities Regulation Code,” SEC warned.

In its second advisory issued March 11, SEC said that based on its investigation, One Lightning is offering different product packages.

SEC said One Lightning undertakes to give investors referral rewards for sponsoring new investors, “a maturity reward for each matured package of their referrals, uni-level rewards or bonuses for up to the third level of referrals upon maturity of their shares and a share in profit.”

SEC added that the product packages offered by the firm are considered securities, required to be registered with SEC per Sections 8 (8.1) and 12 of the Securities Regulation Code.

“You might say that this is a pyramiding company,” SEC Secretary Gerard Lukban said in an interview with ANC.

The sale or offering for sale or distribution of securities in the country without registration is punishable with a fine of not less than P50,000 ($1,128.41) nor more than P5 million ($112,841.35), or imprisonment of not less than 7 years nor more than 21 years, SEC warned.

Red flags

Personal finance guru Randell Tiongson said that fraudulent companies at present have evolved, as some have registered with the government and also have products to sell.

Citing SEC’s advisories, Tiongson said that it is not enough for a company to be registered. The products they offer should also be examined for proper licensing or permission to be publicly offered.

In the case of One Lightning, it is SEC-registered, but it does not have the necessary permission to offer investment products, Tiongson pointed out in his blog post.

“That’s why emphasis should be placed on ‘appropriate registration or licensing’ and ‘legitimate products,’ Tiongson wrote.

One Lightning, for its part, called a general meeting of management and staff on Friday, March 13, in light of these advisories, and the public’s renewed awareness on “too good to be true investment” opportunities.

In a letter to its distributors posted on its Facebook page, One Lightning also said it is preparing for a meeting with SEC on Monday, March 16, regarding the issues arising from its conduct of business.

Crackdown

One Lightning is the latest to be hit by SEC’s stern warnings versus fraudulent investment opportunities.

Earlier, SEC called again the public’s attention to Emgoldex Philippines, an apparent Dubai-based firm that recruits investors to buy gold online and pays bonuses to those who refer friends and acquaintances. (READ: Not all that glitters is gold)

In its February 26 advisory, SEC said even if Emgoldex is a registered entity in foreign countries like Cyprus, Dubai, and Germany, “it is still NOT ALLOWED to conduct investment solicitation activities in the Philippines without first securing the required registration and license from the SEC.”

SEC also warned that any purported public advisories regarding Emgoldex that carry the name of SEC or any of its officials are “unauthorized, fictitious, and fabricated,” especially if they are not found or posted in the commission website sec.gov.ph.

Meanwhile, another popular multi-level marketing firm, Royale Business Club, is facing tax evasion charges worth P359.75 million ($8.11 million) filed by the Bureau of Internal Revenue (BIR).

Thus, Tiongson stressed that it is important for consumers to be very cautious with financial decisions they make, especially when dealing with investment opportunities that are mostly being marketed online.

“Skepticism is advised and encouraged. This need for prudent financial decision-making, however, is not limited to investments. The Internet is your friend. Make good use of it to research and compare, so you can be at an advantage in your financial-decision making concerns,” Tiongson said. – Rappler.com

US$1 = P44.29