Actress and businesswoman Neri Naig is facing charges for estafa and violation of the Securities Regulation Code after persuading individuals to invest in a skin care company that is not authorized to solicit investments from the public, the Securities and Exchange Commission explained Thursday.

Neri Naig arrested for securities violations, estafa

“Siya ay naghikayat ng mga investments dun sa Beyond Skin Care. ‘Yun ‘yung kumpanyang iniimbestigahan,” SEC Director Filbert Catalino Flores III said in a TeleRadyo Serbisyo interview. 

An SEC advisory earlier said Dermacare-Beyond Skin Care Solutions operated by COO Ms. Chanda Atienza and company admin and finance manager Venus Eunice Gonda offered “franchise partner agreements” that promised guaranteed returns equivalent to 12.6 percent interest every quarter for a period of 5 years as well as other complimentary services.

The SEC said the company is not authorized to solicit investments from the public after failing to secure prior registration and/or license to sell securities  or solicit investments.

It warned salesmen, brokers, dealers or agents, promoters, recruiters, uplines, influencers and endorsers of Beyond Skin Care who convince people to invest in the company may be held criminally liable for violating Section 11 of the Financial Products and Services Consumer Protection Act and Section 28 of the SRC. Both offenses are penalized separately with a maximum fine of P5 million or imprisonment of 21 years or both.

A police report earlier said Naig was arrested in Pasay City last Saturday due to 14 counts of violating the Securities Regulation Code with recommended bail of P126,000 for each count.

P/Major Hazel Asilo, Southern Police District PIO chief, said 2 complainants invested a total of P1.5 million in the company after Neri endorsed it.

The court has not recommended bail on the syndicated estafa case. 

Naig’s husband, Parokya ni Edgar frontman Chito Miranda has defended Naig, saying the latter was merely an endorser.

“Endorser lang s'ya tapos ginamit 'yung face n'ya to get investors. Kinasuhan s'ya ng mga nabiktima,” he said in a lengthy Facebook post.

“Wala siyang kinuhang pera sa ibang tao, lahat ng pera nila na kay Chanda, ang may-ari ng Dermacare."

'Mabait asawa ko': Chito Miranda defends Neri Naig after arrest

ENDORSER OR INVESTOR? 

 In the interview, Flores said that under the Securities Regulation Code, companies involved in the buying and selling of securities and  investment contracts must be registered with the SEC.

“Kaya ang SEC nirerequire, bukod sa secondary license ng kumpanya, tapos ‘yung mismong securities nila nakarehistro pati ‘yung nagbebenta kailangan nakarehistro sa amin,” he said.

“Ang kapalit kasi ng pera ng publiko ay kapirasong papel, shares of stock, bonds, contracts of investment. Kaya nirerequire ng SEC na yang kapirasong papel na yan, pruweba ng investment mo ay nakarehistro kasi kailangan na sigurado kayo na ‘yang kapirasong papel na ‘yan ay may value.”

Should Naig be penalized if she was only tapped as an endorser and is not a co-owner of the company?

Flores said there is a distinction between a talent and one who actively asks people to invest in a company.

“Depensa na po kasi ‘yung ‘Talent ako. Ako ay tagasabi lang.’ Ganito po, kung ang ine-endorse lang naman niya ay kunwari, ’Tay, itong produkto na ito’ o sinasabi na ‘Magpunta kayo diyan, maganda mag makeup ‘yan’. Walang problema ‘yan,” Flores said.

“Pero kapag sinabi mo: ‘Magandang investment ito dahil kikita kayo ng ganito. Kikita kayo ng 10 percent or something.’ Parka ganun na po, ‘yun na ho, involved na kayo sa buying and selling ng securities. Kailangan rehistrado na kayo,” he added. 

 He also cited the Howey Test, which defines what constitutes an investment transaction or contract.

Under both US and Philippine law, a Howey Test requires a transaction, contract, or scheme whereby a person (1) makes an investment of money, (2) in a common enterprise, (3) with the expectation of profits, (4) to be derived solely from the efforts of others. 

“Walang investment na wala kang gagawin, except sa securities na talagang legal tulad ng shares of stock,” he said.

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