SEC scores another legal victory against illegal lending

The Securities and Exchange Commission (SEC) has successfully convicted more lending company officers who have submitted falsified documents for their registration with the Commission.

​In a decision dated May 2, the Pasay City Regional Trial Court Branch 111 found Irene L. Casiño, Darhyl L. Casiño, Jose Eric L. Casiño, Edison Agaloos, and Temogin L. Tadeo, incorporators and officers of 7 Lions Lending Management Corp., guilty beyond reasonable doubt of violation of Section 12, Paragraph 3(a) of Republic Act No. 9474, or the Lending Company Regulation Act (LCRA).
 
The court accordingly sentenced each of the officers to pay a fine of P10,000.
 
The SEC filed the criminal complaint against the officers after finding that they made a false statement in their application for the incorporation of 7 Lions Lending, as mandated by the LCRA.
 
The group submitted a Certificate of Bank Deposit in the amount of P1 million, purportedly issued by Banco de Oro-Two Shopping Center Branch in Pasay City, to comply with the minimum paid-up capital prescribed by the LCRA during its registration as a lending company with the Commission in 2017.
 
Upon verifying with the bank, however, the SEC found that no such certificate was issued to 7 Lions Lending. The Commission subsequently denied the company’s application for registration as a lending company.
 
Section 12, paragraph 3(a) of the LCRA penalizes any officer, employee or agent of a lending company who shall knowingly and willingly make any false or misleading statement with respect to any material fact in any application, report, or document required under the law.
 
“The Certificate of Bank Deposit in support of accused’s statement on 7 Lion’s minimum paid-up capital in the Articles of Incorporation, as well as in the Treasurer’s Affidavit and Information Sheet, was established to be false,” the court held.

The Commission has found that the submission of falsified certificates of bank deposit has been resorted to as part of the modus operandi of applicant- lending companies to obtain registration and license from the SEC, despite not actually having the required P1 million paid-up capital.
 
Officers of Naurasidhu55 and X-CEE789 Lending and Trading, Inc. were found to have employed the same modus in securing their respective companies’ registration with the SEC. They have since been convicted under the LCRA.
 
The SEC has also scored two victories against illegal lenders who falsified public documents under the Revised Penal Code.
 
To date, the SEC has cancelled the licenses of 39 financing/lending companies due to various violations of applicable rules and regulations. A total of 58 online lending applications have likewise been ordered to cease operations for lack of authority to operate as a lending or financing company.
 
The SEC, through the Corporate Governance and Finance Department (CGFD), has likewise revoked the primary registration of a total of 2,084 lending companies to date for non-compliance with the LCRA.