Manila, Philippines – Actress and businesswoman Neri Naig is facing charges of estafa and violation of the Securities Regulation Code (SRC) for allegedly enticing investments in an unauthorized skincare company, the Securities and Exchange Commission (SEC) clarified on Thursday.
According to SEC Director Filbert Catalino Flores III, in a TeleRadyo Serbisyo interview, Naig is implicated in soliciting investments for Beyond Skin Care, a company currently under investigation. The SEC issued a stern warning, stating that anyone involved in promoting or encouraging investments in Beyond Skin Care—including salesmen, brokers, dealers, agents, promoters, recruiters, uplines, influencers, and endorsers—could face criminal liability under Section 11 of the Financial Products and Services Consumer Protection Act and Section 28 of the SRC. These offenses carry a maximum penalty of ₱5 million in fines, 21 years imprisonment, or both.
A police report indicates Naig's arrest in Pasay City last Saturday on 14 counts of violating the SRC, with a recommended bail of ₱126,000 per count. P/Major Hazel Asilo, Southern Police District PIO chief, stated that two complainants invested a total of ₱1.5 million in Beyond Skin Care after seeing Naig's endorsement. Bail has not yet been set for the syndicated estafa case.
Naig's husband, Chito Miranda, frontman for the band Parokya ni Edgar, has publicly defended his wife, claiming she was merely an endorser and did not personally profit from the investments. In a Facebook post, he stated that Naig received no money from investors; all funds went to Chanda Atienza, the owner of Dermacare.
A previous SEC advisory detailed that Dermacare-Beyond Skin Care Solutions, operated by COO Ms. Chanda Atienza and company admin and finance manager Venus Eunice Gonda, offered "franchise partner agreements" promising a guaranteed 12.6 percent quarterly return for five years, along with additional services. The SEC emphasized that the company lacked the necessary registration and/or license to solicit investments from the public.
SEC Clarifies Neri Naig Case: The Line Between Endorsement and Investment Solicitation
Manila, Philippines – The Securities and Exchange Commission (SEC) further clarified the legal distinctions surrounding the case against actress Neri Naig, emphasizing the crucial difference between product endorsement and active investment solicitation. While Naig's husband maintains she was merely an endorser for Beyond Skin Care, the SEC's position hinges on the nature of her involvement.
SEC Director Filbert Catalino Flores III explained that under the Securities Regulation Code, companies dealing in securities and investment contracts must be registered with the SEC. This includes not only the company itself but also the securities offered and the individuals selling them. Flores highlighted the inherent risk involved: "The public's money is exchanged for something—shares of stock, bonds, investment contracts. The SEC requires registration to ensure these instruments hold value."
The key distinction, according to Flores, lies in the nature of the endorsement. Simply recommending a product is permissible; however, actively soliciting investments based on promised returns crosses the line. He used an example: "If she only endorsed a product, saying, 'This is a good product,' or 'Try this makeup,' there's no problem. But if she said, 'This is a good investment; you'll earn 10 percent,' that constitutes involvement in the buying and selling of securities, requiring registration."
Flores referenced the Howey Test, a legal standard used in both the US and the Philippines to determine what constitutes an investment contract. The test comprises four elements: (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits, (4) derived solely from the efforts of others. Flores emphasized that legitimate, registered securities, such as shares of stock, are exceptions to the principle of requiring active participation. He stated, "There's no investment where you do nothing, except for truly legal securities like shares of stock." The application of the Howey Test to Naig's actions will be central to determining her liability in the ongoing case.