Friday, April 19, 2024

SEC revokes registration of Infinity8Networks, imposes P1-M fine

The Securities and Exchange Commission (SEC) has revoked the corporate registration of Infinity8Networks Digital Services OPC and imposed an administrative fine of P1 million against the entity for illegally soliciting investments from the public.

The one-person corporation was registered under its sole stockholder and president Franco Delacruz Flordeliza and had a business address in Alabang, Muntinlupa.

In an order dated December 18, 2023, the SEC found that Infinity8Networks has violated the Revised Corporation Code of the Philippines (RCC), in relation to the Securities Regulation Code (SRC), and Presidential Decree (PD) 902-A or the SEC Reorganization Act.

The SEC it received numerous emails inquiring or reporting about the company’s alleged investment-taking activities where it promised guaranteed return of investments.

Investigation conducted by the agency revealed that Infinity8networks Digital Services offered unregistered securities to the public with a minimum investment of P500.00 up to P500,000.00 per account. Investors may earn 30% after 5 days, 500% after 40 days and 200% after 20 days.

Image from the SEC

In its Articles of Incorporation (AOI), the company stated its primary purpose was “[t]o operate, manage, and engage in the business of data processing, web hosting and related activities by providing infrastructure for these activities as well as provision of search facilities and other portals activities for the internet”.

While Infinity8Networksis registered as a one-person corporation with the SEC, it did not secure prior registration and/or license from the commission for the conduct of a public offering. Its AOI also expressly prohibits the company to conduct investment-taking activities.

Under the RCC, no corporation shall possess or exercise corporate powers other than those conferred by law or by its AOI.

Meanwhile, the SRC provides that securities shall be registered with the SEC before they can be offered to the public. Entities offering such securities must likewise secure the necessary license from the commission.

Under PD 902-A, the SEC may suspend or revoke the certificate of registration of a corporation for serious misrepresentation as to what the corporation can do or is doing to the great prejudice of or damage to the general public.

Aside from the revocation of its license, the SEC directed Infinity8Networks to pay a fine of P1 million in accordance with the administrative penalties provided under the SRC.

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