SEC Warns of Gold Investment Scam

Philippines – one that claims to have links with international gold trading firms in Germany and United Arab Emirates – but which the government unit said was not authorized to solicit investments from the public. Such entity, the SEC said, had not secured prior registration and/or license or permit to solicit investments from the SEC as required under the Securities Regulation Code.

The SEC said it had received reports that Emgoldex was using social networking site Facebook to lure investors to subscribe to its “Pinoy Style Patak Patak” for a promise of high returns.

The pitch was that an investment of P1,000 in Emgoldex will earn profits ranging from P5,000 to P10,000.  A placement of P30,000 was being promised with a payout of P180,000 to P360,000.

Several promotional videos posted on YouTube and being circulated through various social networking sites claimed that these hefty profits could be earned in an short as seven days if the investor were to recruit two more investors into the scheme. Photos of deposit slips indicating the payouts were posted in its Facebook page to entice prospective investors that real profits were being made by real people.

“Per verification, Emgoldex Philippines is not a registered corporation or partnership,” the SEC advisory stated.

“In view thereof, the public is hereby advised to exercise self-restraint from investing their money into such high-yield-high-risk investment scheme and to take the necessary precautions in dealing with the above-named entity,” the government entity said.

People with information regarding the operation of this entity are advised to report to the SEC’s enforcement and investor protection department about the operations of this unregistered gold trading firm at telephone numbers 5847187 or 5847652.

The promotional videos of Emgoldex claim its parent company is one called Gold & Silver Physical Metals based in Munich, Germany. It claims to be a company engaged in selling gold in quantities ranging from one to 100 grams using the Internet, in some cases, comparing itself to reputable Internet platforms like eBay, Lazada or

The company pitches gold as an asset class, citing its strong return on investment and how this precious metal was historically a good hedge against inflation. In one of its many videos targeting the Filipino audience, it claims to have about 500,000 investors globally.

The promotional videos talk more about how a prospective client can make money from the multi-level marketing scheme but does not discuss how the company can earn and guarantee the hefty returns promised to investors. Unlike most reputable investment firms, the company does not indicate any local office address in its official website ( and cites only mobile phone numbers. It does not disclose its board of directors or key people behind its organization.

Companies with similar operations and using the same brand name have been the subject of complaints in several other markets overseas. Based on a report from the Boston Globe dated Oct. 22, 2014, for instance, civil fraud charges were filed by Massachusetts Secretary of State William Galvin against EmGoldex Team USA Inc. and four principals on allegations that this group was operating a pyramid scheme. This group has reportedly lured investors to buy and sell gold bars through its online store.

Under pyramiding schemes, proponents make their money by recruiting people into the scheme. The first ones to join typically earn a lot of money, enticing more people to join by spreading this “get rick quick” scheme by word of mouth. The scheme will last only for as long as new people are recruited into the pyramid. Once the “pyramid” collapses, the newest recruits suffer the most.

One website that claims to be the real Emgoldex company selling bars of investment gold – which operates through its website and operating out of Seychelles and Amsterdam – has also warned of using the brand name for “fraudulent actions.” It issued a disclaimer on online marketing schemes using its brand name. In a warning posted as early as July 14, 2014, Emgoldex warned against copycats using the Internet to seek investors with the “promise of fast enrichment, the investment of your own funds and rapid increase of your return.”

“They also consist of receipting of potential customers funds in exchange for promises to create websites, similar to the style and design of the official website of the online store, but with the contradictory information. Moreover, they represent themselves or their legal entities as the employees of the company and online store, and many other unacceptable activities,” the Emgoldex website said.


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