The Philippine Securities and Exchange Commission (SEC) issued a stark warning on January 19th against Epic Trading, flagging the operation as a pyramid scheme. The regulator found that the company's allure stems not from foreign exchange trading but from substantial referral fees tied to recruiting new members. This structure, the SEC concluded, operates as a pyramiding and Ponzi scheme.
Epic Trading's compensation plan explicitly rewards participants for bringing in new recruits. The more individuals an Independent Business Owner (IBO) enlists, the higher their potential earnings. This recruitment-driven model stands in contrast to legitimate business operations, where profits are typically generated from the sale of goods or services.
The Philippine SEC explicitly stated that Epic Trading is not registered as a corporation or partnership. Consequently, it lacks authorization to offer, solicit, sell, or distribute any investment or securities to the public. Such unregistered operations are a significant red flag for potential investors.
Promises of exceptionally high returns with minimal risk, like those advertised by Epic Trading, are characteristic of Ponzi schemes. In these fraudulent operations, early investors are paid using the capital from new investors, rather than from actual profits. The SEC has previously identified and flagged similar operations as scams.
An earlier review of Epic Trading in September 2020 noted disclosure deficiencies and a strong emphasis on recruitment. While that review did not find evidence of securities fraud, as the company was not soliciting investments for automated returns, the Philippine SEC's recent action revises this assessment. The SEC’s current warning includes a securities fraud advisory.
Website traffic analysis for Epic Trading indicated a decline throughout 2021. The United States accounted for the vast majority of its online visitors, representing 83% of traffic. This concentration of traffic in one region, coupled with the regulatory warning, suggests a narrowing operational base.
The SEC urges the public to exercise extreme caution. Any entity promising exorbitant returns with little to no risk should be viewed with significant suspicion. These are often indicators of schemes designed to defraud unsuspecting individuals.