Actor-turned-Senator Robin Padilla has filed a bill which seeks to protect endorsers from getting caught in the legal mess of investment scams.
Senate Bill 2889 was introduced amid the detention of actress Nerizza “Neri” Naig-Miranda and the issuance of a warrant of arrest against comedian Rufa Mae Quinto over their affiliation with Dermacare, the company which was flagged by the government for the alleged unauthorized solicitation of investments and sale of securities.
“Recent events reveal a growing concern for the welfare of endorsers whose names are dragged into various investment scams. Oftentimes, they are the first ones to be accused of crimes related thereto just because their names and faces were made prominent by companies who secured their services as endorsers,” Padilla said in filing the bill.
“This measure seeks to offer protection to endorsers by providing mandatory provisions into their engagement agreements that will clearly define not only their obligations but more importantly, their relationship with the company and their noninvolvement in any sale of investment contracts and securities if the latter is engaged in such business,” he added.
Padilla raised the need for the measure due to the “very technical provisions and lack of public information on the contents of the Securities Regulation Code.”
This, he said, would “deter abuse on the lack of knowledge” the law.
Under SB 2889, all product endorsement agreements must have a full disclosure of the nature of the business and all products covered by the endorsement.
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The agreements must also have a categorical statement on whether or not the business is engaged in the sale of investment contracts and other securities.
“In the event that the business or venture is engaged in the sale of investment contracts or other securities, there must be a clear prohibition on the part of the endorser to engage in the promotion or sale thereof with an expectation to receive profits or commissions if the same is not a licensed broker,” the bill read.
“Businesses or ventures engaged in the sale of investment contracts and other forms of securities shall refuse to accept investments obtained through the efforts of any endorser if the same is not a registered broker,” Padilla proposed.
Meanwhile, endorsers who represent themselves as agents of any business or venture unauthorized to sell investment contracts and other forms of securities shall be liable for any claims filed against them.
Padilla proposed a fine of P100,000 for the first offense on the violation of the proposed law; P300,000 for the second offense; and P500,000 to P1 million and revocation of the company’s certificate of registration for the third offense. — VDV, GMA Integrated News
