MLM Attorney Kevin Thompson: Be warned of Leveraged Profit Sharing Programs

Leveraged Profit SharingWhen Zeek Rewards got shut down, the consumers really lacked an understanding of the problems. As I wrote about in the past, this ignorance in the market was largely our fault. Our “self-regulated” industry failed them. The first one is on us. But with this new breed of Leveraged Profit Sharing Programs (“LPSP”), it’s now on you.

Remember Zeek? It’s been close to eight months since they were shut down. If you will recall, Zeek Rewards was nailed by the SEC mainly for operating as a pyramid scheme and for selling unregistered securities i.e. encouraging passive investments, hinting at lucrative returns on the money, etc. Zeek Rewards taught its participants and the entire network marketing industry a very painful lesson: promises of passive return on investment + a network marketing compensation plan = hurricane of pain.

But it’s not an investment…

Sure, I know the counter-argument. People argue that Zeek never “asked for investments.” Instead, they were selling “sample bids” (wink, wink), which led to activity on the website, which led to profit, which led to profit distributions to the investors / distributors. Curiously though, the vast, overwhelming, ridiculous majority of those sample bids (99%+) were never used, which means the program was just cycling money from older investors to newer ones. While I know the counter-argument, it’s flat out silly. And those of us in the industry, we knew it and we said nothing. We let Zeek take advantage of the credibility we all work hard to create.

I’m getting to the point…

Zeek Rewards was like cocaine for a number of the net winners. They’re now hooked on the high. They want more. As the air in Zeek is deflated, reality is starting to sink in for people: Zeek Rewards is never coming back. With that in mind, it has led to the next generation of high yield investment MLM. I’m referring to these sorts of programs in the industry as “Leveraged Profit Sharing” programs. High Yield Investment Programs, or HYIPs, is a phrase commonly used; however, it’s easy for LPSPs to distinguish themselves from HYIPs because there’s “no investment.” I think LPSP is a better fit because it embraces the very terms they promote in their plans: profit sharing. And it’s precisely how they work in practice. The companies leverage the investments made by participants to grow the company. With growth, comes profit. And with profit, comes distributions to the investors i.e. leveraged profit sharing.

The point…

At some point, consumers have to accept responsibility for their financial decisions. Zeek brought painful clarity on the subject. And it was widely publicized. Perhaps I live in a fantasy world, but I think consumers should now know better. When participants are asked to fund the growth of a company by way of buying “samples” for anonymous, no-name customers, and when they’re promised a return based on company profits, they should simply know better! In this Information Age, where information is readily available on computers and cell phones, the excuses are starting to shrink. LPSPs would cease to exist if they lacked support from participants.

Today…

Where there was 1, now there are many. This is just an example. Recently, I’ve heard of “investor co-ops” where people pool money together and invest in multiple LPSPs. It functions sort of like of a mutual fund, but for…other kinds of programs. The companies they were allocating investor dollars: Banners Brokers, Profit Sunrise and GoFun Places. Why would people pool resources and passively invest in these programs? Because…well, you can decide for yourself. And these are just a few. If you get burned in a LPSP, do not blame the consultants or any vendors. Blame yourself. The information is out there. And by the way, the idea of “invest now, get out fast” might come back to bite you. There are a number of net-winners in Zeek that are currently negotiating deals with the receivership to pay back their gains. The other net-winners, the ones that are hoping for the clouds to clear, they’re about to be jack hammered in a whirlwind of litigation.

Think about it.

+Kevin Thompson

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5 thoughts on “MLM Attorney Kevin Thompson: Be warned of Leveraged Profit Sharing Programs”

  1. By the way, on the advertising side of things. We checked, and we have not approved any JubiRev ads.

    Which menas, you may be viewing an AdSense ad, which is Google.

  2. Well I don’t speak for Kevin, he can do that on his own.

    As for advertisers on this site, we are very careful on who advertises. It as times someone changes their links, to a ponzi scheme, and we are notified we have been known to cancel their advertising.

    Although, I do question the legality of “Rev Share” compensation structures in the USA, I have not called JubiRev a ponzi.

  3. Kevin Thompson who was the attorney for the scam company Bidify did not support those innocent distributors who were scammed of of millions…

    Kevin you have a legal responsibility to get our money back from your buddy Frogie and also his scam e-wallet who has our money also

    How you can pitch BS legal briefs about other companies….but you bailed from the worst one your represented…your a complete sellout and have NO right to comment on anything till you represent us Bidify distributors that you helped ripp off through your representation of this Bidify Scam…you were the attorney saying it was good…we looked up to you for confirmation , direction and clarification on this company which you were head of legally…now your MIA!

    Kevin your a $%%# Jerk and I am sure your A$$ can be sued for bailing on many…
    FNA!!!

    And Tory whats so funny your writing posts on Jubi-Fraud…yet next to your posts we see J Joshua Bastile advertizing (founder JubiRev) my phone room, which you are receiving mixed ponzi money through his banking accounts…

    You guys are pathetic…take what ever scraps you can from ponzi’s then report on them like outsiders…you have both eaten meals from ponzi money FACT!

  4. All good points. I was one of the millions living off the high of Zeekrewards. I never took a distribution and hence lost a few grand… a few grand I never expect to see again, litigation or not. I moved along long ago with the implicit understanding that I was taking a risk. Life goes on.

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