THE Securities and Exchange Commission (SEC) has ordered the shutdown of Building Our Success Stories Network, Inc. (BOSS Network), which it said is fooling investors that it runs a multi-level marketing program.
In a statement over the weekend, the SEC said it had issued a June 18 a cease-and-desist order to BOSS Network for soliciting investments from the public without authorization from the regulator.
Its collaborator 101Upper Class Corp., which Boss Network runs an unauthorized investment scheme with named BOSS Ultimate Program (BOSS UP), is also covered by the order.
The involved parties must immediately stop offering securities to the public and refrain from transacting any business involving funds in depository banks.
“It is clear that BOSS Network is soliciting investments from the public in the guise of operating a multi-level marketing business, with a promise of guaranteed high return of investment,” the SEC said.
BOSS Network was found by the regulator offering investment opportunities through social media, masking itself as a multi-level marketing program for personal care products.
Its “member-investors” are promised to earn points from buying personal care packages and from recruiting more investors into the company. These points are supposedly convertible to incentives, which the SEC said is equivalent to selling securities in the form of investment contracts.
However, BOSS Network is only registered as a corporation engaged in the direct selling of goods and merchandise. Its certification of incorporation prohibits it from soliciting investments and issuing investment contracts, as this activity would require a secondary license from the SEC.
The regulator flagged BOSS Network’s activities as having the features of a Ponzi scheme.
“Clearly, BOSS Network’s business model and capitalization cannot sustain the promised returns on investment, especially if no new investors will come in,” it said.
“Payouts for investors are financed from investments of new recruits/investors. This is a fraudulent scheme which will likely cause grave or irreparable injury or prejudice to the investing public,” it added.
Aside from violating the Securities Regulation Code for selling securities without a registration statement, two of BOSS Network’s incorporators were also found by the SEC as submitting and using invalid Tax Identification Numbers.
BOSS Network was reached out to for comment on the shutdown order but was not able to respond.
The SEC regularly issues warnings on its website about groups that maliciously offer investment opportunities to the public. It has said in several advisories that one of the red flags should be any promise of “ridiculous rates of return with little or no risks.” — Denise A. Valdez
