041907: Market Files - Investment scam in a hospital

Investment scam in a hospital

With the interest rates on bank deposits tumbling down to new lows, there has been an upsurge in investment scams that purportedly offer higher rates, apparently to entice investors to part with their money. The scams have been fine-tuned to effectively go over the initial resistance of investors even with the continuous warning from the Securities and Exchange Commission (SEC) for the public to be wary of offers of fantastic rates for money placements. The investment scams, even coming from supposedly SEC-registered companies, should be thoroughly scrutinized by the investing public who get wooed by such offers of high rates. Unfortunately, the SEC’s warning continues to come unheeded as can be gleaned from emerging reports of another pyramiding scheme uncovered—unfortunately late in the game—by investors who fell for the very high rates of return initially offered for their money. Reports filtering out from a noted hospital in a Metro Manila area show that a couple has apparently victimized their colleagues in what is emerging as another Ponzi scheme. Conservative estimates place the investments that were gathered from the unsuspecting doctors and other hospital personnel at P700 million. One doctor-victim, we learned, has already sought for the garnishment of the couple’s assets after filing a case in the courts for the recovery of upward of P10 million in investments. And to think that the SEC has not been remiss in its timely updates on the resurgence of investment scams as it has linked up even with an Australian government agency that specializes in running after boiler room operators or pyramid operations. In fact, a cursory look at the SEC’s website would immediately alert the public to the do’s and don’ts insofar as investments are concerned. Aside from this, the commission comes up with press announcements reminding the public against being sweet-talked into parting with their money in return for abnormally high interest rates. We understand that the couple-doctor initially paid for the promised fantastic rates on the investments of their colleagues and friends. As the buzz on the high rates reached other doctors and hospital personnel, the couple-doctor got more and more investments and the pyramid went higher and higher. Well, after less than a year, the couple-doctor can no longer give the promised rate of return with checks issued getting rubbery and the investors getting jittery. But as the couple-doctor were part of the hospital group, the initial explanations for the non-payment of the interest-cum-principal was accepted though grudgingly by the investors. Until the garnishment case, when it hits the fan, results in the investors-victims rushing for the recovery of their investments and doing one-upmanship as the base of the pyramid comes tumbling down. By then, the investors would be looking at the loss of their principals, some rolled over together with the high interest. Now, the investors should take heed from the SEC’s own admonition on the proliferation of investment scams. As per the commission’s warning, investors should not “be tricked “ into investing in securities, bonds, commercial papers and other investment instruments unless the securities they sell are registered with the commission. One telltale sign though is the offer of fantastic rates, which could not be borne by the realities of running a business. SEC’s warning also point out that registration of a company with the commission does not accord it with the authority to offer securities, bonds and other investment instruments to the public. Only investment houses and financing companies with quasi-banking license are allowed to sell these securities, which should, however, be registered first. The investing public, including the overseas workers, will have to take this to heart lest they become victims like the doctors in a Metro Manila hospital.   E-mail: hugagni@yahoo.

 

http://www.businessmirror.com.ph/04192007/opinion04.html