Did Disrupt offer unregistered shares to founder affiliates?
What would cause a top-affiliate in an MLM company to start selling shares to their downline?
If you’re Daryl Kingston Djuan, it’s because you believed you had a verbal agreement from the company to do so.
Through his brands “All In” and “The Hub Hive”, Djuan (right) was purportedly soliciting investments from his downline.
Reads an undated “Contract Agreement Between Daryl D. Kingston (YG) & Michelle Riegel”:
Daryl is allowing Mr. & Mrs. Riegel to invest the sum total of $2,500.00 for share equity in his umbrella investment pool with company “Disrupt LLC”.
Once the company goes public Brett & Michelle Riegel will have the option to pull out or purchase more shares as a first option before anyone else on the outside.
At the time of publication, Disrupt Worldwide has made no public announcement of plans to go public. Neither is the company registered with the SEC, meaning an offering of shares either internally or to the general public is obviously an offering of unregistered securities.
How Disrupt were made aware of Kingston’s share offerings to his downline is unclear but, in response to Kingston’s actions being made public, Disrupt has opted to terminate Kingston’s affiliate membership.
Wrote Disrupt CEO Jason Elrod on the 8th of September (Facebook):
We have been informed that a former Disrupt affiliate had apparently been soliciting people to give him money in exchange for a purported “share equity” investment in Disrupt.
Our investigation proved that the allegations were accurate and the affiliate was immediately terminated.
Disrupt is not selling any ownership interest or stock and has not authorized the resale of any ownership interest by this former affiliate or any others. Disrupt did not receive one red cent of investment money from this individual.
Disrupt takes all regulations seriously, and if our legal and compliance staff feel this action is grounds for regulatory discipline we will file a complaint against the former affiliate with the appropriate authorities, in our home state, the affiliate’s home state as well as with federal regulators.
If you are solicited by anyone purporting to represent Disrupt for investment purposes, immediately report any person
who claims to be selling an investment or ownership interest in Disrupt to the the following: (Disrupt Corporate Compliance email address)
Now it seems pretty straight forward. Disrupt affiliate goes rogue, company finds out and terminates his affiliate position.
Compliance job well-done, let’s all move on.
Kingston however is not going down quietly, and it’s his response to the termination that has raised eyebrows.
In an undated written response to Troy Dooly, Kingston wrote:
When Jason decided to continue in the MLM industry after the closing of WUN (WakeUpNow), he contacted a few people, I was one of them.
We all worked hard to bring a different MLM company for those of like mind.
From WUN through Disrupt, Jason and I friendship and business relationship continued.
The closing of WUN did not alter it. Missed months of commission checks did not alter it.
For all intents and purposes, Kingston presents himself as a Disrupt insider. Someone who knows what’s going on inside the company and has a direct line to Disrupt management.
Jason and I have done verbal agreements; both person to person and by phone we even done business handshakes which is an acknowledgement of the commitment and trust we shared toward one another.
It was a verbal agreement that I had permission to include trusted individuals into the pool.
Of course more people companywide will agree with the status quo title of the CEO before me. But time tells all.
It’s Kingston’s response that all of a sudden pushes his offering of shares to the side and redirects focus back on Disrupt itself.
As per Kingston’s response, Disrupt appear to be or have in the past offered shares in a pool. And from the sounds of it, this was an exclusive pool offered only to Disrupt affiliates Jason Elrod contacted when WakeUpNow shut down.
Again, Disrupt have never publicly acknowledged the existence of a share pool, nor are they registered with the SEC.
Troy Dooly is hired by Disrupt and part of that sees him conduct PR for the company. To his credit though, he’s reported on the fallout between Kingston and Disrupt and presented us with source-documents.
In a video commentary accompanying said documents, Dooly makes some interesting remarks about crowd-funding.
[1:28] He (Kingston) was collecting money so people could buy stock.
This wasn’t a crowd-funding situation, the company had given no authorization based on the information I’ve received from them.
Of particular note is Jason Elrod’s response to Dooly regarding Kingston’s claims he had verbal authorization to include people in a share “pool”:
[5:18] I asked Jason about this. Jason said, “No Troy, here’s what happened.”
He goes, “I asked him” (and this is YG), “I asked YG do you want to be part of this. Do you want to be a part of the crowdfunding?
Do you want to be part of the Founders in this? Because we’re gunna crowdfund some of this, we’ve got some shares for you guys”.
Again, this is purportedly from Jason Elrod himself.
What we appear to have is Disrupt offering Founder affiliates shares in a crowdfunding pool.
The problem is, whatever they call it, from the sounds of it Disrupt affiliates have invested funds in shares.
Why? On the promise of a ROI.
You can’t prelaunch an MLM opportunity, offering Founder affiliates shares in an unregistered investor pool and then pretend it’s not a securities offering by calling it crowdfunding.
I mean what exactly was crowdfunded? Disrupt the MLM business opportunity?
If you consider why Disrupt affiliates would invest in Disrupt the MLM business opportunity – the reason this is a securities offering should be abundantly clear.
Disrupt affiliates have a vested financial interest in the success of Disrupt and that alone isn’t a problem. But when you’re asking them to invest in an off-the-books share pool, the motive behind investment into Disrupt by individuals who stand to profit from Disrupt’s business opportunity is financial self-interest.
None of these Founder affiliate’s are investing in this share pool because Jason Elrod is a swell guy, or they think Disrupt are going to go off and build children’s orphanages with the money. They’re doing so because they hope Disrupt can pick up where WakeUpNow left off, and they can get rich in the process.
That is the issue here.
Daryl Kingston Djuan’s offering of shares to unauthorized third-parties is secondary to a much more serious compliance issue.
That being who did Disrupt offer investment in a “crowdfunding share pool” to? What was the criteria for selection and how much was invested?
That I couldn’t find any further information on. But as it turns out, we might not have to wait too much longer to find out.
Here’s a series of recent excerpts from Daryl Kingston’s Facebook feed;
Hey here is the video from Troy, take it for what it’s worth; but at the same time understand that this is not why I resigned but this is there why of terminating me.
definitely more to the story, and I will be putting out a video so everyone can understand how it all went down. The D company is a client of Troy. so I didn’t expect it to really tell the full story!
But as u can see other leaders who been quiet and don’t even know anything about this situation is judging when they should be building!!
I never said I didn’t receive funds from selective people, I haven’t even spoke on the issue publicy; but as u can see how the company and certain leaders operate, HelloSomebody.
They just want likes and comments.. I produce leaders and get people paid.. I didnt take a shot at anyone accept the two who made a fabricated post after blocking me and other refused a man to man in person meeting even after I flew out smh.
But they want to know the truth, all lies wouldnt meet face to face though.. They will go the mile to save what’s left of the company out of desperation and I haven’t even made a move yet smh!
They will try to discredit me in the eyes of others so folks won’t rock with me; but it’s not working as Real Recognize Real. I proved the fraud 10k lady but they didn’t didn’t say a word about that.. Open your eyes people.
One thing I can’t stand is people who jump the gun and fabricate.. It’s about how they trying to make me look to save face, and the route they took with me in my leaving, which was uncaused for..
Like I said this has nothing to do with securities and money ..Video Coming Soon.. Enough of the fabrication!!
I’ve yet to blast anyone or put up anyone dirt as I know and have a lot whoa! I swear Kurupt (My Previous Company) should be the TMZ of MLM..smh ha!!
At the time of publication, Kingston has yet to upload any followup videos.
Top Disrupt affiliate Eric Turner’s take on the matter seems to support Kingston’s claim. Or at the very least suggests there’s much more going on inside Disrupt than is publicly known at this time:
Many have wondered why I’ve stayed quiet, and it’s because I felt there was no need for me to participate in some of the threads over the past few days until most of the information was out there.
Here’s the deal, people make mistakes, shit happens, but nothin pisses me off more than when people can’t just admit they messed up.
All of the extracurricular stuff that has happened, the extra posts, the people coming out of the woodworks claiming other things I have no reason to get involved with.
This is about a company that I helped put together, and it’s a shame that someone that was highly respected by myself and many others would not only do this, but then lie over and over about what happened. THAT’S the part that has upset me the most.
I of course don’t have access to the secret Disrupt affiliate Facebook groups all of these “claims” are being discussed on, but the information’s apparently out there folks.
In addition to offering Founder affiliates shares in a “crowdfunding pool”, what else have Disrupt management and their affiliates been up to of late?