Financial Crime World

Hedge Fund Fraud Rocks Philippines: 20 Arrested in Makati Gala Night Sting

In a shocking raid, Philippine authorities arrested 20 individuals connected to Professional Capability International Inc. (ProCap), a marketing firm accused of soliciting investments without proper licenses from the Securities and Exchange Commission (SEC).

Background

ProCap is a marketing firm that claims to be the marketing arm of ProCap Insurtech Limited, an online “player management platform” that allows players to make predictions on risk management and trading instruments. However, authorities have accused the company of offering investment contracts without a secondary license from the SEC.

The Raid

The joint operation, led by the Philippine National Police Criminal Investigation and Detection Group - National Capital Region (CIDG-NCR), SEC, and Presidential Anti-Organized Crime Commission (PAOCC), took place during ProCap’s “Galaxy Night” at the Dusit Thani Hotel in Makati on October 15. The arrested individuals, comprising 12 Filipinos and eight foreigners from Singapore, Malaysia, and the UK, were reportedly directors, employees, and agents of ProCap.

Charges and Detention

The arrested individuals are facing charges under Republic Act 8799 (Securities Regulation Code) and Republic Act 11765 (Financial Products and Services Consumer Protection Act). They are currently detained at the CIDG-NCR facility in Camp Crame, Quezon City.

Investigation Findings

PAOCC Director Jay Ison revealed that ProCap has been soliciting money from investors since May, prompting authorities to take action. According to an initial report obtained by Rappler, ProCap offered investment contracts without a secondary license from the SEC.

Defense and Reactions

ProCap’s lawyer, Vitaliano Aguirre II, a former justice secretary, attempted to defend his client, claiming it was only a marketing arm and not involved in soliciting investments. However, PAOCC Director Jay Ison emphasized that there was no basis for arresting Aguirre as he did not actively participate in soliciting investments or explaining returns.

Warning from SEC

SEC officials urged investors to be cautious and check investment information on the agency’s website to avoid being scammed. “For those intending to invest, don’t be blinded by the celebrities who are knowingly or unknowingly using unscrupulous people to take their money,” Ison warned.

Key Takeaways

  • 20 individuals were arrested in connection with ProCap’s alleged investment fraud scheme
  • ProCap is accused of offering investment contracts without a secondary license from the SEC
  • The company has been soliciting money from investors since May
  • Investors are urged to be cautious and check investment information on the SEC website