Kaizen Marketing Enterprise

August 13, 2020 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT SEC ADVISORY Based on the information gathered by the Commission, the operators of the debunked BUILDING OUR SUCCESS STORIES NETWORK, INC. 1 ("Boss Network") is now using KAIZEN MARKETING ENTERPRISE under the control of its President, Mr. Gerald Alvarez Rivas 2 to continue its illegal activities by offering to the public its Certified Entrepreneur Online (CEO) program. As posted online, CEO is being offered under the cloak of multi-level-marketing (MLM) by availing of either: The company has thirteen (13) ways to earn: 1. Direct Selling where a member shall earn up to 60% by direct selling of the company's products. 2. Personal Rebates where a member is entitled to the following rebates whenever he personally purchases Kaizen products. Product Amount of Rebate Buah Merah Gold Php35.00 Kaizen Gourmet Coffee Php35.00 Kaizen Fit Black Coffee Php20.00 Grape Seed Oil Extract Php100.00 3. Company Product Sales Rewards (CPSR) where a member shall earn from company product package and purchase sales profit, to wit: a. Global Linear Reward a member shall earn profit from his/her share in the ten percent (10%) of the price of the availed package divided among the members in proportion to their UBP allocation; b. Product Sales Profit Sharing a member shall earn profit from his/her share in the ten percent (10%) of the price of product arising from repeat orders divided among the members in proportion to their UBP allocation; c. Sponsor Support a member shall earn profits equivalent to 5%, 3% and 2% of the pairing income earned by the member's immediate (up to 3 levels) sponsors, respectively. Under this scheme, a member shall be entitled to the respective package's maximum CPSR income despite having no recruits. Under this method, a member can earn up to the maximum amount of the CPSR. However, a member may upgrade to a higher package to maximize the profit. 4. Wholesale Income where a member shall earn wholesale income everytime he/she personally sponsor a person who will avail of the product package. Bronze Php100.00 Silver Php300.00 Gold Php700.00 Elite Php1,000.00 Platinum Php1,500.00 Sapphire Php3,100.00 Ruby Php6,300.00 Emerald Php12,700.00 Diamond Php25,500.00 Double Diamond Php100,000.00 5. Product Package Cycle Reward where a member shall earn one hundred fifty pesos (Php150.00) from every 15-point value paired from a member's leg (left and right) up to the maximum pairing income per day regardless of the level of generations. Packages Point Value Maximum Income per day Bronze 15 point value Php3,000.00 Silver 45 point value Php6,000.00 Gold 105 point value Php10,500.00 Elite 150 point value Php15,000.00 Platinum 225 point value Php15,000.00 Sapphire 465 point value Php19,500.00 Ruby 945 point value Php24,500.00 Emerald 1,905 point value Php28,500.00 Diamond 3,825 point value Php33,000.00 Double Diamond 7,650 point value Php76,500.00 6. Leadership Bonus where an Elite member shall be entitled to earn 10% of product-package cycle rewards of his/her elite direct recruits. 7. Ranking where a member shall earn the following whenever he is promoted: Rank No. of required direct Recruit Additional Income on Cycle Reward Other incentive/s Dreamer 12 Php2,000.00 n.a. Builder 10 Php5,000.00 n.a. Achiever 8 Php10,000.00 Asian Travel Director 6 Php15,000.00 Europe Travel Executive Director 4 Php20,000.00 Rolex watch Presidential Director 3 Php30,000.00 Mercedes Benz 8. Lifestyle where a member's 5th product-package cycle rewards is equivalent to a corresponding point value which when accumulated can be converted to high-end accessories such as LV shoes, Rolex watch, Hermes belt, Gucci bag, and travel tours. 9. Repeat Purchase Rewards where a member shall earn Php150.00 for every repeat product purchases equivalent to a matched 15-point value, in accordance with the table under the Product Package Cycle Reward under his/her structure; 10. Infinity Product Package Rewards where a member shall earn the following income (depending on the purchase of package of his/her downline) for every first (1st) two invites of his direct referrals' recruits beginning from his 3rd downline. Bronze Php50.00 Silver Php150.00 Gold Php350.00 Elite Php500.00 Platinum Php750.00 Sapphire Php1,550.00 Ruby Php3,150.00 Emerald Php6,350.00 Diamond Php12,750.00 Double Diamond Php25,500.00 11. Incentives where a member shall earn incentive points everytime he/she has a matched product package cycle reward under his direct recruits. 12. Product Royalty Rewards where a member who accumulated points shall earn the following: Total Retirement Point Value (RPV) Earnings 10,000 Php50,000.00 100,000 Php500,000.00 1,000,000 Php5,000,000.00 10,000,000 Php50,000,000.00 TOTAL Php55,550,000.00 13. Business Legacy where a member can pass the business from generations to generations including all the benefits that are being enjoyed currently by the member. Stripped to its core, the aforementioned scheme of KAIZEN MARKETING ENTERPRISE through its CEO program, with its focus on recruitment, is undoubtedly a pyramiding scheme masquerading as a Multi-Level Marketing program and therefore, involves the offer and sale of securities in the nature of investment contract to the public. The Securities Regulation Code (SRC) requires that these securities are duly registered and that the concerned corporation and/or its agents have appropriate registration and/or license to sell such securities to the public pursuant to Sections 8 and 28 of the SRC. Per records of the Commission, KAIZEN MARKETING ENTERPRISE IS NOT registered either as a corporation or as a partnership with the Commission, and consequently, IT CANNOT secure a secondary license to solicit, accept, or take investments/placements from the public nor to issue investment contracts and other forms of securities under Section 3 of the Securities Regulation Code (SRC) as prescribed under Sections 8 and 28 of the Securities Regulation Code (SRC). Hence, those who act as salesmen, brokers, dealers or agents or claim to act as such for the offering of KAIZEN MARKETING ENTERPRISE in selling or convincing people to invest in the investment scheme being offered by said entity including solicitations and recruitment through the internet may be prosecuted and held criminally liable under Section 28 of the SRC and penalized with a maximum fine of Five Million pesos (P5,000,000.00) or penalty of Twenty-one (21) years of imprisonment or both pursuant to Section 73 of the SRC. Also, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public may incur criminal liability, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of Securities and Exchange Commission vs. Oudine Santos (G.R. No. 195542, 19 March 2014). The public is advised NOT TO INVEST or STOP INVESTING in any investment scheme being offered by any individual or group of persons allegedly for or on behalf of KAIZEN MARKETING ENTERPRISE to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of them. Should you have any information regarding the operation of the subject entity, please call the Enforcement and Investor Protection Department at telephone numbers (02) 8818-6047 or send your report to the EIPD at [emailprotected] . For the guidance of the public. Pasay City, August 13, 2020. Footnotes 1. With a Cease and Desist Order ( https://www.sec.gov.ph/cdo-2020/building-our-success-stories-network-inc-boss-network-2/ ). 2. The Vice-President of Boss Network.