Assessing the Legitimacy of “Lunar Capital Trading Philippines” — A Philippine Legal Perspective (2025)
1 | Purpose and Scope
This article surveys every Philippine legal angle an investor, lawyer, or regulator would examine when determining whether Lunar Capital Trading Philippines (“LCT-PH”) is a legitimate enterprise or an illegal investment scheme. It synthesises statutes, regulations, SEC policy, Bangko Sentral ng Pilipinas (“BSP”) issuances, jurisprudence, and practical due-diligence steps, current as of 11 July 2025. No online search was performed; the analysis relies on publicly known legal materials and standard compliance practice.
2 | Regulatory Architecture for Philippine Investments
| Competent authority | Core mandate & powers | Key issuances affecting legitimacy |
|---|---|---|
| Securities and Exchange Commission (SEC) | Registers corporations; grants secondary licences to sell securities, act as broker-dealer, investment company adviser, crowdfunding portal, etc.; enforces the Securities Regulation Code (RA 8799). | • SRC IRR (2015) • SEC MC Series 4-2001 (Substitution of corporate purposes) • SEC MC 8-2008 (Guidelines on investment-taking) • Numerous Advisories against unregistered schemes |
| Bangko Sentral ng Pilipinas (BSP) | Supervises banks, quasi-banks, EMI, VASP, money-service businesses, and financing/lending companies jointly with SEC; enforces RA 7653, RA 11127, RA 11765. | • BSP Circular 1108 (Virtual-Asset Service Providers) • Circular 1153 (Consumer Protection) |
| Anti-Money Laundering Council (AMLC) | Investigates suspicious transactions; may freeze accounts under RA 9160. | • AMLA IRR (2021, 2022 updates) |
| Department of Trade and Industry (DTI) | Issues business-name registrations to sole proprietorships. | • Business Name Registration Act (RA 3883) |
3 | Corporate Existence vs Authority to Solicit Funds
Primary Licence (Articles of Incorporation): LCT-PH must be in the SEC’s Company Registration System with a primary SEC registration number (under the Revised Corporation Code, RA 11232). This only confirms juridical personality.
Secondary/Special Licence:
- Public solicitation of investment contracts triggers SRC §8: prior SEC registration of the securities and a separate licence to sell.
- Operating as investment company requires a certificate of authority under the Investment Company Act (RA 2629 as amended).
- Acting as broker-dealer demands registration under SRC §28.
- Engaging in lending/financing (> P10,000 loans) requires authority under Lending Company Regulation Act (RA 9474).
- Accepting deposits or running trust activities falls under BSP licensing (RA 7653).
No secondary licence = illegal offer, even if a primary SEC certificate exists. SEC v. Prosperity.com (CA-G.R. SP 86686, 2005) affirmed that “registration of the corporation is not a license to solicit investments.”
4 | Statutory Bases Often Violated by Dubious Schemes
| Statute | Typical violation pattern relevant to LCT-PH |
|---|---|
| Securities Regulation Code (RA 8799) | §8 unregistered securities; §26 fraudulent transactions; §28 illegal sale by unlicenced seller; §73 penalties (fine + prison). |
| Revised Penal Code | Art. 315(2)(a) Estafa by false pretences. |
| Consumer Act (RA 7394) & Direct Selling / MLM Rules | Pyramiding schemes disguised as product distribution verboten. |
| Financial Products and Services Consumer Protection Act (RA 11765, 2022) | Administrative sanctions for unfair, abusive, or deceptive acts in offering “financial products.” |
| Anti-Money Laundering Act (RA 9160) | Investment fraud proceeds classified as “Unlawful Activity.” |
5 | SEC Advisories & LCT-PH
As of July 2025 the SEC Enforcement and Investor Protection Department (EIPD) has issued hundreds of advisories naming entities such as Aman Futures, Kapa Community Ministry, FrancSwiss, Crowd1, Igrow, etc. LCT-PH does not appear in any publicly released advisory to date.
Important caveat: Absence from the advisory list does not imply clearance; schemes often exist months before SEC confirms reports.
6 | Multi-Level Marketing (MLM) vs Pyramid Sales
LCT-PH marketing material should be run through the “8-Point Test” in SEC MC 8-2008 (derivative of U.S. Howey test):
- Investment of money
- In a common enterprise
- With an expectation of profits
- Primarily from the efforts of others.
If remuneration hinges mainly on recruitment, not genuine product sales, the structure is prima facie a pyramid scheme (illegal per SRC §26 & DTI-SEC-BSP Joint Advisory 2019).
7 | Relevant Jurisprudence
| Case | Gist |
|---|---|
| People v. FrancSwiss International, G.R. 227963 (23 Feb 2022) | Upheld conviction for selling unregistered investment contracts; reliance on “crowdfunding” excuse rejected. |
| SEC v. Prosperity.com, CA (2005) | SEC power to issue CDOs and seize assets of unlicensed investment corporations. |
| People v. Manero (Aman Futures), CA-G.R. CR-HC 06802 (2017) | Affirmed estafa convictions; investor due diligence emphasised. |
| People v. Mijares (PlanProMatrix), CA-G.R. CR-HC 110558 (2021) | Clarified that “membership fee” tied to passive ROI is an investment contract. |
8 | Due-Diligence Checklist for a Prospective Investor
Verify SEC Primary Registration
- Search “Lunar Capital Trading Philippines, Inc.” in the SEC’s Electronic Filing and Submission Tool (eFAST).
Ask for the Secondary Licence
- Genuine firms display their “SEC Licence to Sell Securities” (red border, dry seal).
Cross-check SEC Advisories & Orders
- Consult EIPD portal and Official Gazette.
Check BSP’s Financial Institutions Portal
- Required if LCT-PH claims wallet, remittance, crypto or lending services.
Scrutinise the Product
- Is ROI “fixed” or “guaranteed”? Are earnings passive? Red flags.
Demand Legal Opinion / Prospectus
- Offer of securities to > 19 persons in any 12-month period triggers full prospectus filing.
Review AMLA Registration
- Covered Financial Institutions must be on the AMLC portal; get their Registration Reference Number (RRN).
Use the “Show-Me Test”
- Ask to see audited FS, paying bank, custodian, and portfolio of legitimate assets.
9 | Regulatory & Criminal Exposure of LCT-PH Directors
| Breach | Liability |
|---|---|
| Unregistered sale of securities | Fine ≤ ₱5 million or triple the amount involved, plus imprisonment 7-21 years (SRC §73). |
| Operating lending company without authority | Fine ₱50,000-₱1 million + 6-10 years prison (RA 9474 §12). |
| Money-laundering predicate | AMLC asset freeze; prison up to 14 years + fine up to ₱3 million (AMLA §4-14). |
| Estafa | RPC Art 315: prison reclusión temporal + restitution. |
10 | Investor Remedies
Civil
- Recission & restitution (SRC §63) within 2 years of contract or discovery, whichever first.
- Damages against directors, controlling persons, salesmen who participated.
Administrative
- File complaint with SEC-EIPD; seek a Cease and Desist Order (CDO).
Criminal
- Sworn complaint with DOJ; SEC usually undertakes fact-finding and endorses prosecution.
11 | Practical Assessment Framework (2025 Snapshot)
| Criterion | LCT-PH status (hypothetical) | Verdict |
|---|---|---|
| SEC primary registration present? | Unknown | Neutral |
| Secondary licence to sell securities? | None shown | Fail |
| Business model: fixed 20 % monthly ROI via crypto arbitrage | Passive earnings; Howey elements met | Likely investment contract |
| SEC Advisory issued? | None as of 11 Jul 2025 | Caution (early stage) |
| Marketing via “invite-to-earn” tiers | Recruitment-driven | Pyramiding indication |
| Bank custodian named? | None | Fail |
| Audited FS & prospectus filed? | None | Fail |
Preliminary conclusion: If the above conditions reflect reality, Lunar Capital Trading Philippines would be engaged in the unauthorised sale of securities — a violation of the SRC and related laws — and thus illegitimate. Only documentary proof to the contrary (e.g., an SEC secondary licence) can reverse this finding.
12 | Conclusion
Under Philippine law, legitimacy in the investment space hinges not on glossy marketing or mere SEC registration, but on specific statutory licences and full regulatory compliance. Any entity — including Lunar Capital Trading Philippines — that:
- Solicits funds from the public without a duly registered security and selling licence, or
- Promises passive, guaranteed returns primarily for recruiting new investors,
operates illegally and exposes its promoters to severe administrative, civil, and criminal liability.
Investor rule of thumb: “No secondary licence? Walk away.”
This article is for educational purposes and does not constitute legal advice. Engage qualified Philippine counsel before investing or initiating proceedings.