Nevada issues Wings Network securities warning
It was only a few months ago that Wings Network “suspended” its US operations.
Of course that was all pseudo-compliance baloney, with the company’s affiliates continuing to recruit US-based investors.
This eventually attracted the attention of the Massachusetts Securities of State, who filed a pyramid scheme complaint against the company in May. The case is currently making its way through the courts.
In the meantime, the US state of Nevada has now issued its own warning against Wings.
A press-release issued by the office of Ross Miller, Nevada’s Secretary of State, reads
Secretary of State Ross Miller warns Nevadans to beware of a possibly fraudulent investment scheme targeting minority communities, specifically Spanish and Portuguese.
Wings Network is a multi-level marketing program that is advertising online, and being sold door-to-door or through friends and relatives.
The Secretary of State’s Securities Division believes Wings Network’s proposed business opportunity is an investment contract and a security that should be, but isn’t, registered with the State of Nevada.
Some multi-level marketing programs may be structured in such a way that they constitute a security and should be registered as such. Miller cautions individuals not to buy or sell packages from Wings Network without conducting thorough research and seeking independent legal advice.
“It is vital that every investor conduct the most thorough due diligence possible when making an investment,” said Miller. “Investing is a complicated and risky process.
Even the initial receipt of interest payments or distributions paid to some investors, or an investment sold by someone you know, doesn’t guarantee that an investment is legitimate.
A Ponzi scheme may have similar attributes. Potential investors just can’t be careful enough. And always remember that if it sounds too good to be true, it probably is.”
BehindMLM reviewed Wings Network back in December of 2013 and drew similar conclusions.
With Wings Network, under the guise of cloud computing services, essentially you’ve got a wholly affiliate-funded scheme, with commissions paid out directly on recruitment and then residually when a recruited downline recruits new affiliates.
The lack of retail and recruitment driven nature of the business puts Wings Network squarely in pyramid scheme territory.
Recruitment of new affiliates, getting them to buy in at one of three levels and then going off and recruiting others who do the same is the core of the business.
Once new recruitment stops, the commissions dry up and Wings Network, like any other pyramid scheme, will implode.
“If it sounds too good to be true, it probably is.”
Footnote: Hat tip to Patrick Pretty.