SEC issues advisory on TuneGaga

The Securities and Exchange Commission (SEC) has announced a public advisory about the mobile application TuneGaga.

According to the advisory issued by SEC, TuneGaga is not registered as a corporation or partnership and operates without the necessary license and/or authority to solicit, accept, or take investments/placements from the public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC).

The report states that the scheme employed by TuneGaga shows indication of a possible “Ponzi Scheme” where monies from new investors are used in paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent members in case of scarcity of new investors.

The creator of the said app claims that TuneGaga is a great way for music fans to earn extra income listening to music. Users can sign up as fans to listen to the music of their own choice. Moreover, TUNEGAGA/TuneGaga pays its users every week through various payment methods allegedly supported in over 180 countries.

As posted on its website, investors can join by registering first; then, they can choose from any of its Subscription Plans starting at PHP 1,967.95USD 34INR 2,843EUR 32CNY 244 (Learning Plan) up to PHP 121,104.54USD 2,064INR 174,948EUR 1,966CNY 15,029 (Platinum Plan). It claims that investors can earn from PHP 2,055.25USD 35INR 2,969EUR 33CNY 255 up to PHP 151,381.35USD 2,580INR 218,685EUR 2,457CNY 18,786 monthly, depending on the subscription plan they availed of. In addition, investors can also earn from referral bonuses up to USD 120PHP 7,042INR 10,170EUR 114CNY 873 or 5% of the subscription amount/plan.

As such, the Securities Regulation Code (SRC) requires that said offer and sale of securities must be duly registered with the Commission and that the concerned entity and/or its agents should have the appropriate registration and/or license to sell such securities to the public.

Since the subject is not registered, the SEC advises the public not to invest or stop investing in the investment scheme offered by TuneGaga and its representatives.

The SEC also mentioned that those who act as salesmen, brokers, dealers, or agents of TUNEGAGA/TuneGaga, selling or convincing people to invest in the investment scheme being offered by the said entity, including soliciting investments or recruiting investors through the internet, may be held criminally liable under Section 28 of the SRC and penalized with a maximum fine of Five Million Pesos (PHP 5,000,000USD 85,200INR 7,223,000EUR 81,150CNY 620,500) or imprisonment of Twenty One (21) years or both under Section 73 of the SRC (SEC vs. Oudine Santos, G.R. No. 195542, 19 March 2014).

Should you have any information regarding the operation of the subject, you may send a report to [email protected].

Source: SEC