THE Securities and Exchange Commission (SEC) said on Friday it has issued a cease-and-desist order (CDO) against Trading Point Holdings Limited, operating under the names of XM, XM Global Limited and XM Philippines, for allegedly soliciting investments from the public without the necessary license.
In an order promulgated on Nov. 7, the SEC directed Trading Point to immediately stop offering and selling securities in the country and directed the company and all individuals acting on its behalf to cease their online presence related to XM’s investment activities.
The regulator identified former senator and boxing icon Emmanuel “Manny” Pacquiao and forex trader Jonathan Lou Reyes as among those who had endorsed the XM trading platform.
The regulator also barred XM from conducting any business involving funds held in its depository banks and prohibited the transfer or disposal of its assets “to prevent grave damage and prejudice to all concerned and ensure preservation of assets for the benefit of investors.”
The enforcement action followed an investigation by the SEC’s Enforcement and Investor Protection Department, which found that XM had been offering derivatives, foreign exchange instruments, cryptocurrencies and other financial products through its website and its mobile application.
The SEC found that the company had been using its XM Philippines Facebook and YouTube accounts to promote its services, which required users to create an account to access plans by depositing a minimum amount depending on their chosen package.
Users would then be allowed to start purchasing and trading securities through the different XM platforms, enticed by promises of potential healthy returns.
XM also offered bonuses and cash incentives through a “friend referral program” to encourage a constant flow of new investments.
The SEC stressed that the XM Group was not registered as a corporation or partnership in the Philippines and therefore could not obtain a secondary license to offer securities to the public.
“XM operates under its parent company, Trading Point, an international financial services company that publicly offers, sells and provides brokerage services and products, through its website xm.com and the XM app,” it noted.
Under the Securities Regulation Code (SRC), all securities must be registered with the SEC, and anyone engaging in the business of buying or selling securities must be licensed as a broker or dealer.
“The fact that XM has tapped and made available local banks and e-wallets as its payment partners clearly shows that investors in the Philippines are primarily its target market,” the order stated.
The commission said there was substantial evidence that XM sold unregistered securities without the required license, constituting a violation of the SRC and perpetrating “a fraud on investors,” thereby justifying the issuance of a CDO.
The SEC previously issued an advisory in March 2024 warning the public against investing in unregistered online platforms such as XM.
Original article: Halt order issued versus Pacquiao-endorsed XM
