After having to seek for four hospitals illegally selling company stocks to prospective investors, the Securities and Exchange Commission (SEC) is now suspicious that there might still be other medical centers nationwide using the same scheme.
In an advisory, SEC said that even if the four hospitals victimizing innocent people with fake investment scam have been legally sought after, there is still a “possibility that other hospitals are [also]engaging in the unauthorized offer of their shares of stock.”
SEC said that it has received information that several individuals and/or groups of persons have been offering or “pre-selling” securities to the public in the form of shares of stock in hospitals currently under construction.
“To attract investors, these shares of stock allegedly grant the purchasers certain hospital benefits, such as, but not limited to waived or discounted OR [operating room]fees; free or discounted private room, ward and ICU [intensive care unit]accommodations; discounts on use of ICU equipment, medicines, medical supplies and other merchandise; and discounts on hospital services as well as out-patient and in-patient case rates,” SEC said.
In the recent cases handled by the regulator’s Enforcement and Prosecution Department (EPD), it was proven that Pacific Global Medical Center Inc. (PGMCI), DillMan Doctors Hospital Inc. (DDHI), South East Asia Medical Inc. (SEAMI), and United Doctors Service Corp. (UDSC), are guilty of aforementioned scheme.
SEC has issued cease and desist orders against PGMCI and DDHI, and imposed payment of penalties on SEAMI and UDSC, for offering unregistered securities to the public in violation of Sections 8 and 12 of the Securities Regulation Code (SRC).
“The public is hereby informed that these shares of stock being offered are within the definition of ‘securities’ under Section 3.1 of the Securities Regulation Code and are required under Section 8 of the SRC to be registered with the SEC before being offered or sold to the general public,” the commission said.
Moreover, SEC advised the public to “exercise prudence in dealing with any individuals and/or groups of persons offering for sale shares of stock in hospitals, and urges anyone who has knowledge or information about any transaction involving these securities to report such activity immediately to the commission so that appropriate measures can be taken.”
Madelaine B. Miraflor