THE Securities and Exchange Commission (SEC) made permanent the cease-and-desist orders (CDO) against 14 firms belonging to the bankrupt Legacy Group barring them from selling assets without the regulator’s approval to ensure that creditors would be paid back.
In a notice posted on its Web site, the SEC en banc said it has decided to make permanent the CDOs it issued against the 14 firms on Feb. 26 as the companies had not sought to have these lifted.
The 14 firms that were issued CDOs were Legacy Consolidated Plans, Inc., Legacy Card Inc., Galaxy Realty & Holding, Inc., Shining Armor Property, Inc., One Realty Corp., One Card Co., Inc., Legacy Consolidated Assets Holdings, Inc., Fusion Capital Corp., Legacy, Motor, Inc., Scholarship Plans Phils., Inc., Conventional Realty Corp., Legacy TD Fund, Inc., Legacy GS Fund, Inc. and Legacy HY Fund, Inc.
“Considering the gravity of the offenses committed, the multitude of affected investors, and in order to prevent further violations and to protect the investing public from similar machinations and grave irreparable damage, it is imperative that the CDO be made permanent,” the orders read.
The companies are units of the failed financial services group Legacy, which was led by businessman turned politician Celso G. De los Angeles. The group allegedly engaged in a multi-billion pyramiding scheme through its units.
The commission based the restraining orders on the investigation conducted by its compliance and enforcement division, which found the said companies to have engaged in connivance and concert to solicit investments without proper licenses from the SEC.
It also said that its investigation showed that the firms enticed people to put money in the company by promising that its products offer up to a 100 percent return and are safe investments.
The firms had promised to pay back investments through post-dated checks on equal monthly or quarterly basis that were issued to clients upon their payment.
The enforcement department added that the companies’ assets must be preserved to prevent these from being dissipated and ensure that investors and plan holders of the company would be paid back.
“…such acts, unless restrained, will operate as a fraud to investors or will otherwise cause grave or irreparable injury to the investing public,” it said.
The Legacy Group filed the insolvency petition at the SEC late last year but this was rejected after it failed to provide the necessary documents to back its claim.