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The Securities and Exchange Commission (SEC) has ordered the closure of Forsage and Forsage Philippines for activities related to the illegal solicitation of investments.
In a statement Wednesday, the corporate regulator said it issued a cease and desist order to Forsage on September 17, ordering it to stop selling securities to the public in the form of investment contracts.
The company was also prohibited from using funds from its depository banks to preserve assets it took from investors.
The SEC first issued a warning to the public against committing to Forsage in June, noting that it received several complaints about the group’s investment activities. At first, the SEC said that Forsage was not a company registered with the commission.
He found out through his research that Forsage invites investors to participate in a crowdfunding platform that uses blockchain technology. Through sales commission programs, the group promises passive income to investors.
However, the SEC said that Forsage’s income is based on the membership fees it charges investors, making it unsustainable. Their activities are also not authorized, as the sale of securities is regulated by the SEC.
“Forsage is not registered … nor has it been issued a secondary license to operate as a securities broker or issuer of securities or mutual funds,” the SEC said.
Despite the SEC’s warning in June, the company continued to operate, hence the regulator’s decision to issue a cease-and-desist order.
“[T]Forsage’s investment practices, if not restricted, will operate as fraud for investors or the investing public as it uses a ‘Ponzi scheme,’ ”the SEC said.
“It is not an investment strategy, but a credulity scheme, which works only as long as there are an increasing number of new investors joining the scheme,” he added.
Forsage is last on the SEC’s list of unauthorized investment traders ordered to shut down this year. The others are Fast Track Worldwide, Inc .; JOCALS688 Beauty and Wellness Products Trading, Inc .; Building Our Network of Success Stories, Inc .; CROWD1 Asia Pacific, Inc .; Lion City Finance Group, Inc .; and Payasian Pte. Ltd. Corp. – Denise A. Valdez
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