DOJ indicts New Seataoo, Seataoo OPC for illegal investment scheme
The Department of Justice (DOJ) has indicted New Seataoo Corporation and Seataoo Information Technology OPC for engaging in illegal investment schemes, following a complaint filed by the Securities and Exchange Commission (SEC).
In a resolution dated October 22, state prosecutors found prima facie evidence to charge New Seataoo and Seataoo OPC for violating Sections 8 and 28 of Republic Act (RA) No. 8799, or the Securities Regulation Code (SRC), in relation to Section 6 of RA No. 10175, or the Cybercrime Prevention Act.
The state prosecutors also recommended to charge the companies with 54 counts of violation of Section 26 of the SRC, in relation to Section 6 of the Cybercrime Prevention Act, with each count representing the complaints filed by its investors.
New Seataoo Chief Executive Officer Widiana Chen, Project Manager Dylan Lim, and directors Anna Rose Jangao Tero, Jonathan Tuazon Garcia, Danny Tuazon Sudaria, Lew Yean Yee, and Seow Kai Sheng, as well as Seataoo OPC’s single stockholder, Jayson Corono Clidoro, were likewise implicated in the case.
Section 8.1 of the SRC prohibits the offering or selling of securities without a registration statement duly filed with and approved by the SEC, while Section 28 requires all persons engaged in the buying or selling of securities to be registered as broker or dealer with the Commission.
Section 26 of the same law makes it unlawful for any person to engage, directly or indirectly, in any act, transaction, practice or course of business related to the purchase or sale of any securities which would defraud or deceive any person.
Meanwhile, the Cybercrime Prevention Act imposes a penalty that is one degree higher for crimes committed through information and communication technologies.
State prosecutors upheld the findings of the SEC in the complaint filed in January that Seataoo group offers securities in the form of investment contracts through its cross-border dropshipping e-commerce platform, without securing a secondary license from the Commission.
The Seataoo group was found to have enticed the public to become online sellers by depositing money into its platform to participate in its supposed dropshipping business. It promises its investors with guaranteed returns ranging from seven percent to 12 percent, without engaging in any genuine selling activity.
“By offering and selling unregistered investment contracts to the public and concealing the true nature of their operations, New Seataoo and Seataoo IT and their responsible officers violated Section 8 of the SRC,” the DOJ resolution read.
“Their failure to register these securities with the SEC deprived the investing public of the safeguards and disclosures required by law, thereby constituting a clear and deliberate infraction of the said provision,” it stated.
State prosecutors added that Seatoo group’s scheme resembles the nature of a Ponzi scheme, a form of fraudulent transaction, where profits provided to investors were derived from contributions made by new participants and not from actual business activities.
“Respondents misrepresented their companies as a legitimate e-commerce platform when, in truth, there was no inventory, no supplier arrangements and no real product movement. The sellers could not operate their own independent online shops,” the DOJ resolution read.
“The system merely simulated transactions and internally rotated funds, creating the false appearance of a functioning business. The totality of these acts constitutes a deliberate and systematic scheme to defraud the public,” it added.
As early as June 2024, the SEC revoked the certificates of registration of New Seataoo and Seataoo OPC for offering unregistered securities. Subsequently in December 2024, the Commission En Banc denied for lack of merit the appeal of the companies and upheld the revocation order. #