4 days ago
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The Court of Appeals (CA) said the Securities and Exchange Commission was right in issuing a cease and desist order (CDO) against Superbreakthrough Enterprises Corp., doing business under the name 1UP Time, for its unauthorized solicitation of investments from the public.
In a decision promulgated last February 11, 2025, the Fifth Division of the appellate court rejected the petition of 1UP Time and ruled that the SEC did not commit grave abuse of discretion when it issued the CDO and subsequently made it permanent.
SEC Chairperson Emilio B. AquinoSEC Chairperson Emilio B. Aquino described the CA decision as “a significant step in protecting investors from unlawful investment schemes and maintaining the integrity of the financial markets.”\
“The SEC reiterates its commitment to safeguarding the interests of the investing public and ensuring that entities operating in the Philippines adhere to securities laws,” he added.
Citing an earlier case decided by the Supreme Court, the CA explained that the SEC may validly issue a cease-and-desist order if a proper investigation or verification had been conducted and there is a finding that the act or practice, unless restrained, will operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice to the investing public.
“A review of the records shows that both requisites were present, thereby justifying the issuance of the CDO,” the CA held.
The appellate court noted that the SEC conducted investigations before issuing the CDO; that 1UP Time was afforded due process because it was informed of the investigation’s findings and was given an opportunity to file a motion to lift the order.
It noted that, 1UP Time was fully aware of the allegations against it, particularly that its product packages were considered as investment contracts.
The SEC issued the CDO against 1UP Time, and its President, Juluis Allan Nolasco, its directors, officers, and agents, in December 2023 for illegally soliciting investments from the public. The Commission made the CDO permanent in April 2024.
Nolasco has previously been a subject of a CDO for promoting illegal investment activities through Alphanetworld Corporation, otherwise known as NWorld.
The SEC Enforcement and Investor Protection Department’s (EIPD) monitoring resulted in the discovery of 1UP Time’s activities.
Upon investigation, 1UP Time was found to have been offering securities in the form of investment contracts in the guise of selling product packages without a secondary license from the Commission.
These packages include health, wellness, skincare, and personal care products, priced from a P10,000 to P188,000, with promised returns ranging from 25% to 35% of product discounts, recruitment bonuses, and other incentives.
Section 8 of the Securities Regulation Code, states that securities should not be sold or offered without a registration statement duly filed with and approved by the Commission.
“As held by the SEC En Banc, the evidence gathered by the SEC-EIPD showed that 1UP Time’s customers paid money to be placed in a binary system with the expectation of earning profits through the efforts of their recruits. Given this structure, the SEC En Banc concluded that 1UP Time was, in reality, offering unregistered investment contracts to the public,” the CA noted.
It added that, “Since 1UP Time neither obtained a secondary license from the SEC to offer securities nor registered its product packages as securities, its actions were deemed to have operated as a fraud or posed a substantial risk of grave or irreparable harm to investors.
