Throughout the course of this debate we have proven and demonstrated
that the legalization of Kapa is not a necessity and not beneficial.
This time allow me to state my key points why Kapa is not practical at all.
First, Kapa is mathematically impossible,
unsustainable and unrealistic because it
promises impossibly high returns to the
donors. Add studies/stat
Since its inception in 2015, Kapa has gained
a massive following because of its highly
alluring investment proposition.
In KAPA, members are enticed to make
“donations” with a promise
of “blessings” equivalent to 30% of their
donations to be paid out
every month and for life. Yet, KAPA does
not have any concrete and
stable business or source of income.
Show evidence to prove this point
How mathematically impossible?
Show legit investment calculations/studies which prove na
30% each month is impossible to achieve
Why ponzi scheme?
One element –
Companies that engage in a Ponzi scheme focus all of
their energy into attracting new clients to make
investments. Show maybe a connection between this
“need to attract new clients” and the “massive following
since Kapa’s inception” and Kapa’s way to attract new
clients is its highly alluring investment proposition.
Ponzi Scheme Red Flags
https://www.investopedia.com/terms/p/ponzischeme.asp
The concept of the Ponzi scheme did not end in 1920. As
technology changed, so did the Ponzi scheme. In 2008,
Bernard Madoff was convicted of running a Ponzi scheme
that falsified trading reports to show a client was earning
a profit on investments that didn't exist.
Regardless of the technology used in the Ponzi scheme,
most share similar characteristics:
1. A guaranteed promise of high returns with little
risk
2. Consistent flow of returns regardless of market
conditions
3. Investments that have not been registered with
the Securities and Exchange Commission (SEC)
4. Investment strategies that are secret or described
as too complex to explain
5. Clients not allowed to view official paperwork for
their investment
6. Clients facing difficulties removing their money
Case: G.R. Nos. 209655-60 January 14, 2015

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
PALMY TIBAYAN and RICO Z. PUERTO

In this case, a judicious review of the records reveals

TGICI’s modus operandiof inducing the public to invest
in it on the undertaking that their investment would be
returned with a very high monthly interest rate ranging
from three to five and a half percent (3%-5.5%).43 Under
such lucrative promise, the investing public are enticed
to infuse funds into TGICI. However, as the
directors/incorporators of TGICI knew from the start that
TGICI is operating withoutany paid-up capital and has
no clear trade by which it can pay the assured profits to
its investors,44 they cannot comply with their guarantee
and had to simply abscond with their investors’ money.
Thus, the CA correctly held that accused-appellants,
along with the other accused who are still at large, used
TGICI to engage ina Ponzi scheme, resulting in the
defraudation of the TGICI investors.

To be sure, a Ponzi scheme is a typeof investment

fraud that involves the payment of purported returns to
existing investors from funds contributed by new
investors. Its organizers often solicit new investors by
promising to invest funds in opportunities claimed to
generate high returns with little or no risk. In many Ponzi
schemes, the perpetrators focus on attracting new
money to make promised payments to earlier-stage
investors to create the false appearance that investors
are profiting from a legitimate business.45 It is not an
investment strategy but a gullibility scheme, which
works only as long as there is an ever increasing
number of new investors joining the scheme.46 It is
difficult to sustain the scheme over a long period of time
because the operator needs an ever larger pool of later
investors to continue paying the promised profits toearly
investors. The idea behind this type of swindle is that
the "con-man" collects his money from his second or
third round of investors and then absconds before
anyone else shows up to collect. Necessarily, Ponzi
schemes only last weeks, or months at the most.
The investment scheme is doomed to fail. KAPA
cannot possibly sustain
paying out a 30% monthly interest without
recruiting new members and
soliciting more money from the public.
To illustrate, KAPA would need at least P15 billion
monthly to pay 5
million members who have invested at least
P10,000 each.
Without new members or additional investments
coming in, the
pooled funds would have diminished by the third
month.
Show evidence to prove this point
How do you say that it is doomed to fail? Prove
your conclusion.
“paying out a 30% monthly interest without
recruiting new members and
soliciting more money from the public.”
The affirmative could argue that, WE CAN SUSTAIN
PAYING OUT 30% INTEREST WEVEN WITHOUT
RECRUITING NEW MEMBERS. We don’t need new
members to solicit money from because we are
not a ponzi scheme nga, we are legal. We have
legit businesses. And since we have legit
businesses WE CAN SUSTAIN, we also invest in
bitcoins nga which is gaining popularity na.

Focus on the fact that there is no clear showing

that they really have legit businesses etc.

Read https://www.sec.gov/fast-
answers/answersponzihtm.html

KAPA violated Republic Act No. 8799, or the Connect your law to your conclusion that Kapa
Securities Regulation violated Section 26.
Code, which requires the registration of securities
before they can be How did Kapa violate Section 26?
offered for sale to the public.
Section 26. Fraudulent Transactions. – It shall be hat acts if any did Kapa commit to show that they
unlawful for any person, really violated the law
directly or indirectly, in connection with the
purchase or sale of any securities State factual circumstances showing that there is
to: violation
26.1. Employ any device, scheme, or artifice to
defraud;
26.2. Obtain money or property by means of any
untrue statement of a
material fact of any omission to state a material
fact necessary in order to
make the statements made, in the light of the
circumstances under which they were made, not
misleading; or
26.3. Engage in any act, transaction, practice or
course of business which
operates or would operate as a fraud or deceit
upon any person.
Second, the effect of KAPA is massive that it will
tremendously destroy our economy.
According to GSCCII:
Lending companies have also noted a drastic
decline in transactions.
The fishing industry is now suffering from the
decline in the number of fishermen.
Several canneries of the tuna processing plants,
private schools, and other businesses noted
that they have lost some of their personnel
already to such investment groups.
When businesses and industries shut down, there
shall be no more employment and the economy
plummets to an abyss.
Such economic condition will undoubtedly drive
away legitimate businesses and investors to an
exodus outside of General Santos and the region.
Rolivel Elusfa, a farmer from Kidapawan City who
has degrees in both Sociology and Economics,
said that if schemes further operate, this could
pose great damage to the country’s economy.
In their town, he knows a lot of farmers who invest
from P5,000 up to their own farm land titles.
Unbacked opinion.
Show studies/legal basis how Kapa will destroy our
economy.
What has been its effect since it started.
Make a direct connection, cause and effect, why
Kapa could be blamed for the declining
transactions of lending companies, why fishing
industries suffer a decline, etc
Affirmative could say, Kapa is not the reason why
these industries are suffering, maybe people really
do not need to borrow money, or ayaw na nila
magfish because their children are now educated
thus wants to have office work. Other persons
mentioned maybe were given better opportunities
in other industries, greener pastures.
Also basis nung lending companies etc? what
study? Kanino galing yung statements nay an do
they have authority?
How do you say businesses and industries shut
down just because wala nang employment? Out of
blah blah number of unemployed persons in the
Philippines, madami pa man pwede iemploy.
Also, dib a businesses are thriving, new businesses
are opening because the people through Kapa
were given blessings to enable them to have
capital for their own businesses.
Who are these people?
If you have to mention persons and their opinions,
dapat may authority in what they are saying.
Example:
He added that as a farmer he understands the From the records of the Philipppine Statistics
sentiments of his friends knowing Office xxx
that farming is not a stable form of income with
very low cost of crops these days. Or
Ironically, this is despite the Philippines being an
agricultural country. According to a study conducted by Steve Jobs, a
world renowned n American business magnate,
He added if the farmers continue to rely on entrepreneur and investor, xxx xxx
investment schemes,
which pays them more than farming does, it will
compromise the country’s food production.

Chris Akus, an investment enthusiast and a victim

of Ponzi Schemes stated bad effects towards the
economy and how it destroys humanity.

According to Chris, ponzi scemes kill creativity,

gradually destroy work ethics and cause a decline
in social services by encouraging greed and
laziness.

Although ponzi schemes may temporarily alleviate How will they not curb inflation?
poverty, they will not curb inflation
because a decline in production reduces What is inflation pala?
availability of goods for purchase and demand
becomes higher than supply.
Ponzi schemes may have falsely inflated a
country’s GDP but the effect is negligible
because the economy is not something that
responds to right or wrong.
So on a macro scale, the effects of ponzi schemes
on our economy are minimal.
This explains why folks whole heartedly embraced
the schemes because many people saw them as a
reliable escape
from poverty and a golden opportunity for
financial breakthrough.

INDIRECT EFFECT OF PONZI SCHEME

Many people have lost so much money in ponzi schemes and this has reduced their capability to access
means of livelihood, health facilities and other necessities.
Money lost by investors has created a loop hole in the financial system of the country

because many folks withdrew their life savings from banks while some borrowed money and injected
into these schemes.

The loss of these monies signify loss of capital formation which slows down economic growth.

People. Look around you. Stop calling KAPA as an investment scheme. Lets us all swallow the bitter pill
that

KAPA is an investment scam.