SEC, BSP, media call FrancSwiss a Ponzi, warn against online HYIPs

The Philippine Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas (BSP) and the media have jointly called FrancSwiss – arguably the most popular High-Yield Investment Program (HYIP) in the Philippines today — a Ponzi scheme and warned people against investing in similar online investment scams.

A Ponzi scheme is an investment fraud that promises to pay an abnormally high return on one's invested capital. Money used to pay investors do not come from businesses or investments but, rather, from money put in by new investors. Ponzi programs usually reach a saturation point where new monies are not anymore enough to pay older investments. When that happens, payouts stop and newer investors do not receive any payment anymore.

Click "Read More" to view the recent warning issued by the SEC, BSP, and major Philippine media companies against investing in FrancSwiss and other similar online Ponzi programs.

The SEC warning which was published in major dailies goes:

The Securities and Exchange Commission (SEC) has received reports that the following entities are allegedly in internet-based ponzi investment schemes: FRANCSWISS, SWISS CASH, UNIVERSAL FOREX SYSTEM, GLOBAL AMERICA and PRIVATE FOREX TRADE, INC. These entities are not registered with the Commissio, and have no permit or authority to solicit investments from the public. Private Forex Trade, Inc. has in fact been found to be misleading the public by showing a fake SEC Certificate of Registration on its website.

The following are some of the features of an internet-based ponzi investment scheme:

• No SEC registration
• Investment in foreign currency, preferably in US Dollars
• Offers or guarantees a huge profit in a very short period
• Utilizes a binary network (i.e. upline and downline) to earn commissions
• No paper trail (i.e. contracts, receipts)
• Promises little or no financial risk
• Provision for a lock-up period where an investor cannot touch the investment (i.e. 60 days)
• Assures pay-off of investments in a short time
• Uses high-pressure methods to convince investors to reinvest their earnings
• Unknown principal office, address, founders, directors or officers
• Orientation seminars are conducted informally

This investment scheme ordinarily collapses as fast as they are created while leaving its investors behind and unable to recoup their investments.

The public is therefore urged to report any offer of investment made by persons who represent the above-mentioned entities or other entities using similar modus operandi to the undersigned in order that the appropriate enforcement action can be taken:

Director Hubert B. Guevara
Compliance and Enforcement Department
Securities and Exchange Commission
5/F SEC Building, EDSA, Greenhills, Mandaluyong City
(632) 727-3367
ced@sec.gov.ph

BSP Governor Amando Tetangco Jr. also issued a warning to the public against these online investment scams. In an interview with the Philippine Daily Inquirer, he said that FrancSwiss is "an online Ponzi scheme. The Bangko Sentral, in coordination with the Securities and Exchange Commission, the Philippine Stock Exchange and the National Bureau of Investigation, is looking into this."

Media companies Philippine Star and ABS-CBN also recently published reports reiterating the BSP and SEC warning. 

Do you believe FrancSwiss is a scam? Join the discussion in the HYIP: FrancSwiss thread in the PMT Forum.