2 weeks ago
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The Securities and Exchange Commission (SEC) has issued a cease-and-desist order (CDO) against a lending business operator who does not have the necessary registration and approval from the Commission.
In an order issued last Feb. 18, 2025, the Commission en banc directed Fernando Joquico Santos, including his business operators, promoters, representatives, agents, and all persons acting on his behalf, to stop promoting and facilitating lending transactions.
This is until they have incorporated and secured the necessary authority to operate as a lending or financing company.
Santos and his agents were also ordered to stop offering and advertising their lending business online or any other media and to take down all the materials related to the promotion of the lending business.
SEC Commissioners Javey Paul D. Francisco, Karlo S. Bello, and McJill Bryant T. Fernandez voted in favor of the issuance of the CDO, while Commissioner Rogelio V. Quevedo abstained. SEC Chairperson Emilio B. Aquino was on official business.
The case stemmed from the request of the Office of the City Prosecutor of San Juan City to verify the legitimacy of Santos’ lending business, as he has filed several cases in the past two years against his clients/borrowers for issuing bounced checks as payment for the loans obtained from him.
Santos has allegedly been offering loans to the public, ranging from ₱30,000 to ₱600,000, since 2018. He also hires agents or middlemen tasked to offer loans, monitor loan balances, and ensure the loan collection in exchange for commissions between two percent and three percent per loan transaction.
However, records from the SEC showed that Santos had not registered his business with the Commission and had been conducting lending activities without a certificate of authority from the regulator.
Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA), provides that a lending company should be registered with the SEC and is required to secure a certificate of authority from the Commission to lawfully operate as a lending business.
Section 12 of the LCRA further states that a person engaged in lending business without such authority may face a fine of ₱10,000 to ₱50,000, or imprisonment of six months to 10 years, or both.
“The high volume of lending transactions and the substantial amount of loans involved, undoubtedly reveals Mr. Santos’ intention to continuously engage in the business of lending for profit,” the order read.
It added that, “The foregoing clearly constitutes a clear violation of the LCRA which warrants the immediate issuance of a cease-and-desist order to immediately prevent an illegal act, and to protect the public from Mr. Santos’ fraudulent business activity i.e. misrepresenting to the public that he has the license to operate a lending business.”
