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SEC Shuts Down ZeekRewards $600 Million Involved

 

SEC Shuts Down $600 Million Online Pyramid and Ponzi Scheme

FOR IMMEDIATE RELEASE
2012-160

Washington, D.C., Aug. 17, 2012 – The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze to halt a $600 million Ponzi scheme on the verge of collapse. The emergency action assures that victims can recoup more of their money and potentially avoid devastating losses.

The SEC alleges that online marketer Paul Burks of Lexington, N.C. and his company Rex Venture Group have raised money from more than one million Internet customers nationwide and overseas through the website ZeekRewards.com, which they began in January 2011.


Additional Materials


According to the SEC’s complaint filed in federal court in Charlotte, N.C., customers were offered several ways to earn money through the ZeekRewards program, two of which involved purchasing securities in the form of investment contracts. These securities offerings were not registered with the SEC as required under the federal securities laws.

The SEC alleges that investors were collectively promised up to 50 percent of the company’s daily net profits through a profit sharing system in which they accumulate rewards points that they can use for cash payouts. However, the website fraudulently conveyed the false impression that the company was extremely profitable when, in fact, the payouts to investors bore no relation to the company’s net profits. Most of ZeekRewards’ total revenues and the “net profits” paid to investors have been comprised of funds received from new investors in classic Ponzi scheme fashion.

“The obligations to investors drastically exceed the company’s cash on hand, which is why we need to step in quickly, salvage whatever funds remain and ensure an orderly and fair payout to investors,” said Stephen Cohen, an Associate Director in the SEC’s Division of Enforcement. “ZeekRewards misused the power of the Internet and lured investors by making them believe they were getting an opportunity to cash in on the next big thing. In reality, their cash was just going to the earlier investor.”

The SEC’s complaint alleges that the scheme is teetering on collapse with investor funds at risk of dissipation without its emergency enforcement action. Last month, ZeekRewards brought in approximately $162 million while total investor cash payouts were approximately $160 million. If customers continue to increasingly elect to receive cash payouts rather than reinvesting their money to reach higher levels of rewards points, ZeekRewards’ cash outflows would eventually exceed its total revenue.

Burks has agreed to settle the SEC’s charges against him without admitting or denying the allegations, and agreed to cooperate with a court-appointed receiver.

According to the SEC’s complaint, ZeekRewards has paid out nearly $375 million to investors to date and holds approximately $225 million in investor funds in 15 foreign and domestic financial institutions. Those funds will be frozen under the emergency asset freeze granted by the court at the SEC’s request. Meanwhile, Burks has personally siphoned several million dollars of investors’ funds while operating Rex Venture and ZeekRewards, and he distributed at least $1 million to family members. Burks has agreed to relinquish his interest in the company and its assets plus pay a $4 million penalty. Additionally, the court has appointed a receiver to collect, marshal, manage and distribute remaining assets for return to harmed investors.

The SEC’s investigation was conducted by Brian M. Privor and Alfred C. Tierney in the SEC’s Enforcement Division in Washington D.C. The SEC acknowledges the assistance of the Quebec Autorite des Marches Financiers and the Ontario Securities Commission.

Source: http://www.sec.gov/news/press/2012/2012-160.htm

SEC

Comments (54)

  1. 12 Daily Pro, Ad Surf Daily, Equinox International…..it took years to get 1% of my money back. This is going to be a long process. Don’t let anyone tell you different. I’ve been through it and I was lucky to get my $1000 back from ASD. 3 days before the SEC shut them down I mailed my check. When I found out what happened I emailed their support department and they mailed my check back. I was lucky. Many are not so lucky.

  2. I Just Wonder Now What? If Zeek was not located in the US then there were no Problams like this. Am i Right? what about all the Other Bids Companies? I still hope that this will be somthing like happened with Amway abd did change the Industry Thnks for the Update ted

  3. I laugh, I do not believe a word, this is not a pyramid! purpose of your paper is to kill hope and create panic! We will menshe.No other companies I do not nravyatsya.Mne not like powders, I will buy for $ 1 luchshe.Zik best! It’s true!

  4. It is the handiwork of a strong lobby of vested interests who were feeling endangered by the prresence of a goliath like ZEEK. Honest money was being attracted to a legitimate and solidly designed program . Now there will be a lot of liquidity back in the market for crooks, hyips, and fraudsters to lick and lap. This is just what the SEC and AG N Carolina combine have been bribed into doing. If ZEEK has been dubbed as not legitimate, THERE CANNOT BE ANY “LEGITIMATE” EARNING OPPORTINITY ONLINE. JUST NONE.

  5. As I see it the problem was not on the Penny Auction business but in the affiliate program, Zeek Rewards. The payout was just unsustainable especially when the profit was supposed to come out of the Penny Auction operation. There should have been a cap in the compensation or higher qualification requirements. Other Penny Auction sites like QuiBids and Overstock most likely would not be affected. My sympathy to those who lost money on this venture especially those in my down line. I hope we get at least part of our money back.

  6. i have been too long on zeekrewards and i have found that zeek is a very good and honest business and company and is helping many people economically across the world !! every one trusts on zeekrewards so it should not be shutdown like this and very easily and very suddenly !!! please open it for GOD sake !! its very important for many families as many families totally depend on it !!!!

  7. I do not believe 1 word of the SEC report… I still stand behind the Zeek Rewards Corporate… My opinion is you need to leave U/Sand start a program elsewhere – I will Join it. The SEC are just BROKE and need to keep their lawyers occupied with our money for a while. I can’t believe these Zeek affiliates who have earned and benefitted so much from Zeek rewards they are sooo negative. They will pocket most of the money and share a mere pittance with the rest of the affiliates. SEC is a joke… their report was full of lies. Most of the garbage they had there were things that paul and others changed in the company looooong ago… 5 CC customers give me a break.

    People use your head how could zeeks take in 620 mill and pay out 600 mill in 1 month and yet!! in a couple of days have 225 million cash that these criminal SEC’s say they have seized. A compaNY going broke cannot have 225 million cash. wise up. the government is broke and needs your money duh. how can you all be so quick to believe a government that have PLUNGED you and your country into the “greatest depression” ever? SMH

    TO MAKE MATTERS WORSE THEY CONCOCTED SOME STORY ABOUT PAUL TAKING 1 MILLION FOR HIS FAMILY??????? What.,. thats all he took? Ridiculous a ponzi schemer has 225million at his disposal and ALL he took for him and his family was 1 million… how dunse can people be – to believe these lies… sigh…

    1. Yes, you observation :”a ponzi schemer has 225million at his disposal and ALL he took for him and his family was 1 million?” seems to be pertinent. It’s strange situation. Or is totally false they took only 1 million from 225million for him and his family, or isn’t a Ponzi scheme at all.

    2. Greedy government afraid they were not getting their fair share! What other big businessman would have 225 million in available cash and NOT be paying themselves a few million dollars? Because they call it SIPHONING now everyone is getting ugly. THEY, the US GOVT. took our business….our money….no one else.

  8. im reading all this grate comments but i guess we r missing some points in here, 1. the problem im thinking start from greediness of some top leaders who bash about zeek and im sure they knew whats going on and they knew this is an illegal business and if they say no i know that they r just BSing, im in a network for 14 years, and i had my bad and good days, and almost 6 months ago a friend of mine came to me since he knew i was very big in network and i can do some work done offers me a $3000 investment coming from his side to just have me there and also he offers to give the same opportunity to 3 of my top leaders so we can bring people in, now im talking to those leaders who did this to their friends and families and leaders, if i was thinking like them i would of take the offer and put my people in this situation, but instead i did my own research and i chose not to let them get involved with this company and even i sent them out an e mail even the friends that never been involved with network and families and many people even if i heard they were talking about zeek i stooped them with the facts and experience i have in network, many people showed me their account ohhh look at how much i made but when u asked them did u cash out they said no and they didnt know they were looking at the points lol not money any ways im not here to say im the good guy and they r the bad guy but 1st we need to blame those leaders who they never care and put people in this situation if we had people like my mind set and they stooped some people doing this business with the good reasons and facts we wouldn’t have this many people get hurt, i really feel bad for u guys i wish i could some how help and its really sad i saw some one here said if zeek is out im going to die this is very very sad when u put people in this situation and they have hope and they trust u and they believe u im really sorry behalf of those leaders who they really mess this things up i wish i could stop many people but i did what i could for my ships and loved ones and friends and families

    1. Hi Andy,

      If you are serious about MLM and looking for a ground floor opportunity with amazing comp plan and owners in Top 50 Billionaire list, send me an email.

  9. Sorry to see many lives will be affected. Hoping everything turns out well for all involved. Networking is a wonderful industry and sometimes even with good intentions things can turn sour, as with any other industry. Thanks Ted for all of your updates on all of the occurrences in the networking industry.

  10. For all of you who are shamelessly pictching your company/program please remeber: “There but for the grace of God go I”. Show some empathy, ie: leadership.

  11. I personally think that some people will not agree that others can give partial solutions to unemployment, if the goberment can not that. There are lots of people , that are actually unemployed in this country and this kind of work where helpink them to find a hope.

  12. It seems it’s OK to give Goldman Sachs 750 billion in tax Dollars so their CEOs and top execs can get their bonuses on time, for unleashing GLOBAL triple dip recession! through Subprimes CDOs, ABCs, and all those other Wall Street cons and ripoffs. No SEC needed there! Bernie Madoff? Let his niece be in charge of the SEC no scrutiny of conflict interest there. 30 YEARS of Ponzi schemes and nepotism. Facebook not providing full disclosure prior to it’s IPO? No SEC there just the little people getting ripped off again. Nothing ZEEK REWARDS has allegedly done comes close to those but the SEC is there like a rash! Zeek benefited countless ordinary people. Looks like thats the problem! Wonder whose relative is in charge now

  13. Hey everybody I hope u all get all your money back which u put in. I don’t understand why the US Government waited this long to investigate, suppose if they intervened earlier they wouldn’t have had their hands on the $600 million!! which they are only giving some of it back.

  14. Hi everyone, the worst thing besides people losing their money and their “way of life” is the impact on the network marketing industry.
    Burke dratically affected the life of 1,000,000 Zeekers but has also affected the life of millions of other MLMs in a time where we all need the MLM system, everything is is broke.
    If I was a Zeeker, a CLASS ACTION against Burke and associates should be in the works!

  15. Is there not a solution for zeekrewards ?
    if they find around USD 100-150 million to put them in a blocked account (for people who want to stop commission and take back their money instead of paying bids again). AND they change their compensation plan so that, the win money correspond a real income. It can be safe, and zeekrewards can continue.
    The main thing is if the CEO wants to save Zeek?
    Perhaps i?m wrong ?

  16. My thoughts and prayers go to all those affected by Zeek closing down (no need for further considerations regarding the company now that it is closed).
    Trust me, this is a great industry (the best of all) to be involved with but we have to treat it like any other business (like any other, it is primarly a people&trust business), we have to make sure we pick the right company (consider everything: Founders&Management, economical strenght, Filosofy&Marketing strategy, type&line of products, Compensation Program not just a mere Plan, support structure, support team and an educational system&support system…last but not least, what stage of growth is the company in: Foundation, Concentration, Momemtum or Stability) and the correct team.
    If we do that and are willing to work hard (never trust anyone that says “you don’t have to do anything”…”I’ll put people in your organization”, etc…that never works!) for our dreams, everything is possible within 2 to 5 years!!!

  17. I am so tired of the US government “protecting” me via EPA, FDA, SEC and all the other 3 letter agencies.
    EPA won’t allow refineries to be built or forests to be managed; FDA won’t allow organic drugs on the market if not developed by “big pharma” which won’t use natural ingredients because there is no profit in it. Where is the SEC when the banks were/are gouging us and CEO’s taking $10 million salaries. Burks only took a couple million for himself. What the SEC and Feds really hate is that ZEEK is international, so the majority of reps were not liable for US taxes. Get the government out of my hip pocket and let me earn a decent living.

    1. Hi Judy,

      I somewhat agree with you about those 3 letter agencies but I have only one question, why Zeek, there are other MLM companies which are there for many many years and they are also multinational. 1.5% daily return for 5 min work, its not sustainable. MLM is a serious business for serious people. Even if you are doing it part time, it needs full time efforts if you expect it to replace your full time income. Key for success in any MLM business is Timing, financial backup and comp plan. If you are really serious about your financial freedom and ready to work hard, we have a team of MLM leaders which can help you succeed.

  18. I am a member of Zeekreward for 5 month, what seems to create a confusion with this report is that we are buying securities, the company never wanted its affiliates to use the word investment or securities, all i know is that i am a part-owner of online business which generate its income by auctioning items where the highest bidder wins, its called penny auction but if you do the math its really a dollar because anytime you place a bid a dollar is deducted from your account, therefore i found it hard to believe the way people are betting 24/7 that money does not excessively render income to the company. For example if the cost of camera $400.00 retail, it sell on the penny auction block for $169.00 in reality its $169.00 x 100= 16,900.00 that goes for any penny auction co. therefore with that kind of system of marketing i find it hard for the company not to have money.

  19. I truly find it remarkable how people are very open to investing money into ANY internet business without performing due diligence. Internet companies usually INFLATE profits to make people invest. What’s sad is that there are individiuals who really think there is a quick way to make a return on your investment. WAKE UP people.!!! There is no quick get rich internet business no matter what!! Even if the timeline is 6 months for pay out. Give me a break….its only reflected that way to feed off your emotions of gaining more money; quickly. Why don’t all you investors form a REIT. Buy Real Estate for goodness sake. Your money will reap rental income. How about that!! Its hard asset……its not internet jargon. Why don’t you investors form a corporation and build a rental portfolio!!! Hire a management company to look after the grounds while income flows in every month!!!! There are commercial and residential properties in foreclosure right at this moment. Its not rocket science here! $620 million dollars can be better used with Real Estate as your commodity is so MANY various ways with shares given back to its investors. I understand some people just can’t grasp that idea and want the quickest way to obtain an inflated return; well it doesn’t happen that often. Invest in Real Estate,build developments, buy low and resell, buy foreclosures,form a realistic income stream. Then donate money to charity and write off your worries. Its simple and less complicated then internet investments. Just my opinion and speaking from experience. Real Estate has never let me down and I have reaped rewards in the worst market. My partners have no complaints and I don’t have the govt freezing anyones funds.

  20. Exactly!,!! A lot of people are missing that point. Zeek would not have been able to sustain the payouts and this would have happened
    eventually. So many people were joining and putting in alot of money. In my mind I always questioned how they were paying out so much $ just from their penny auctions. I was going buy a small amount of bids but am blessed that I hadn’t yet. My heart goes out to those that have lost thousands. Hopefully you will be able to get at least some of your money back.

  21. What a great post Barbara Cementar wrote above. I am very impressed, yet holding on to the hope that Zeek comes through this.

  22. I never bought an investment nor bought srcurities, I bought bids to give away to customer and that generated points, I was never told that I was buying Securities, by the way, there was alwas a legal advice stating at the end of the presentations stating exactly that, you are not buying an Investment nor Securities, that was clear, sp how in the world they are being sued or closed for Securities, they will win this just lik AMWAY and HERBALIFE, history repeats again, Zeek is and will be the #1. Let the investigation continue. Positive always wins negative.

  23. I’m still not convinced that Zeek did anything wrong. Numerous people were taking money out of their annuities, 401K’s, savings, cash value in life insurance policies, etc. Those withdrawals threatened the financial foundation of the insurance companies who sell annuities and life insurance and the banks who offer 401K’s and savings. Both insurance companies and banks need your money to use to pay their executives those outrageous bonuses. Both have tremendous influence and I’m convinced they were the reason the SEC aggressively pursued ZeeK and shut it down. Both could not compete with Zeek. After all, would you rather get UP TO 5% on your money annually or 1.5% daily. I’m saddened and disappointed that Zeek has been shut down. It provided hope for people like me that we would not always be forced to accept our current financial dilemas. If this is a Ponzi scheme, why didn’t Paul take the $225 million and leave $1 for the affiliates? Why were there only eight complaints against Zeek? Why wasn’t the majority of the affiliates complaining?

  24. The most important detail to know; is by what extent the Affiliates were being paid back on a daily basis through earnings from the “real” penny auctions (i.e. auctions for which customers paid $.65 per bid), and by by what extent the Affiliates were being paid back from revenues generated by new Affiliates joining Zeek.

    If Zeek took in $162 Million, and paid out $160 Million on a given day, then what percentage of the $162 Million was earned through the auctions.

    Knowing this, would help me to decide for myself, at least, whether Zeek was, or was not a Ponzi scheme.

    In my mind, this was the information the Attorney General’s office was asking for, which Zeek was not willing to divulge.

    It would appear, Zeek’s lawyers knew” ” in-the-end” they were going to be forced to divulge this information.

    Is this why Burkes decided to ” just throw in the towel”, in exchange for leniency ? It appears this way to me.

    I was an investor and really wonder was much of my money I will ever see after the “vultures” are done picking at the carcass of the late great Zeekler.com.

    If anybody knows the answer to this, please post here and write me back also at [email protected]

  25. Almost all the comments are about money….please read:
    1 Timothy 6:10
    King James Version (KJV)
    10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

    Our concern at this moment should be our future:

    Mark 8:36
    King James Version (KJV)
    36 For what shall it profit a man, if he shall gain the whole world, and lose his own soul?

    Lets work on that first and then this will be applied to us all:

    Matthew 6:33
    King James Version (KJV)
    33 But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you

    God will take care of us all in this sad time of the world governments devouring the People.

  26. I feel sorry for those that had their hearts set on making this company work and feel that t5hey have all been let down by the system that is supposed to check out businesses. It is a know fact that until something goes wrong nothing is done. I hope all will be refunded and the owner(s) put away for a very long time.
    The wold is full of networking businesses most are good but some filter through as this one has done. One should always check the policies and procedures of any networking style of business, to this end I can offer a guide that has helped man people around the world, it is part of our business to help and of course offer you a business that has a turn over of £1 billion and is only 12 years old, known as one of the fastest growing businesses in the networking world. The UK arm of my business has 10 of the best products with more to follow once the USA company gets the go ahead to improve it’s range here in the UK, do email me for more information. Gray

  27. Unfortunately in this world there are people who take over the jealousy and envy when someone is doing well. And these people will do everything to destroy this good. Hundreds of thousands of people Zeekrewrads gave confidence in the future, faith in online business and now someone wants to destroy it. Like hundreds of thousands of Zeekrewrads partners who trust and respect this company, I believe and hope that the truth will win and remain envious with a long nose …

  28. hola lamento mucho la perdida de capital de muchos , yo tengo a penas como 2 anos en la industria del mlm y la verdad esta cambiando mi vida financiera, y si me invitaron a este negocio de zeekRewards y la verdad vi una buena opoprtunidad pero de alto riesgo, pero buena la idea, yo decidi no entrar y a los downlines que les invitaron les decía lo que yo pensaba( que era buena oportunidad pero de alto riesgo), es algo diferente a ciertos multiniveles, pero bueno se q algunos ganaron y otros perdieron asi es la vida, lo que les puedo decir que no se desanimen y sigan adelante busquen alguna empresa de multinivel certificada o reconocida y es el mejor camino a tu libertad financiera , pero bueno todo esto es parte de un aprendizaje y no queda mas que seguir adelante , asi que les deseo exito en lo que hagan y no se desanimen hay muchas oportunidades solo es cuestion que las busques e investigues y con tu esfuerzo y perseverancia llegaras a tus metas, así que ANIMO saludos

  29. Hello, reading it everything I simply in perplexity what you write hearings, and what opinions at you, I though work not so long ago in Zeek, only 4 months, but I deduced money, and the company pays. Also pays that day in which promised. So before writing nonsense and to think out hearing, it is necessary to study the company. Here from such silly people as all of you also occurs.

  30. Have seen this Action taken by the Powers That Be too often before. Can anyone say they received their $$ back or any of it in this regard?? There is only one huge reason why the Powers That Be take this Action. Of course they won,t ever admit it. How can a business be a ponzi scheme when it has real people with real products, people who are not hiding their identity, representing it?? Why aren,t many other similar business shut down by now?? The Powers That Be won,t ever admit this reason why either.

  31. OMG.. I not believe that zeekrewards is ponzi scheme where is proof to SEC about all this ,and SEC say that will be refund money an investor who lost money i know that zeekrewards is ok site i can’t think other.. can SEC explain all that? When will know more information about zeekrewards what say?

  32. I’m sure you have learned about the shutdown of ZeekRewards.com due to an investigation by the Securities and Exchange Commission in the USA. This is sad and disappointing, to say the least. I had done some research on the ZeekRewards.com business and found it to be a sound and exciting opportunity.

    Unfortunately it was too good to be true. Although, I do not believe ZeekRewards.com was at fault. I have read some news on the shutdown and kept an open mind which has helped me to make some terrible points very clear. I don’t believe you have any reason to feel ripped off or embarrassed.

    If you look around and keep an open and objective mind you will notice, quite obviously, that big money is kept in the hands of a few. And even though it seems we have a fair and just political and legal system, that couldn’t be further from the truth in some cases.

    ZeekRewards.com had a system that was, in fact, very simple. The system was also clear for all to see and did not hide anything. What the ZeekRewards.com system did do, was allow a lot of people to share in what was a very successful and fast expanding sales’ business. This would have never continued forever but it was a great way to gain a large market share very quickly ? this would not have been favoured by many corporations, governments and banks who already have a strangle hold on the markets they have created.

    I have read a few news stories reporting on the shutdown of ZeekRewards.com. Below is one of these stories. I have chosen some interesting points to bring to your attention. Please read the story and then continue to read what I have outlined and elaborated on.

    NEWS STORY

    By NATHALIE TADENA

    The Securities and Exchange Commission said it has shut down ZeekRewards.com, a $600 million online Ponzi and pyramid scheme that was on the verge of collapse and had raised money from more than one million customers.

    The SEC alleges online marketer Paul Burks of Lexington, N.C., and his company, Rex Venture Group, raised the money through the web site ZeekRewards.com, which they began in January 2011.

    Mr. Burks agreed to settle the SEC’s charges against him without admitting or denying the allegations. He agreed to pay a $4 million penalty and relinquish his interest in the company. The court has appointed a receiver to manage and distribute the remaining assets to investors.

    Attempts to reach Mr. Burks and his company weren’t successful. The web site has been taken down.

    According to the SEC’s complaint, customers were offered several ways to earn money through the ZeekRewards program, two of which involved purchasing investment contracts that weren’t registered with the SEC.

    Investors were allegedly promised up to 50% of the company’s daily net profits through a profit-sharing system in which they accumulated rewards points that could be used for cash pay outs. However, the SEC said the company’s web site fraudulently conveyed that the company was extremely profitable when instead most of ZeekRewards’ revenue and the net profits paid to investors were composed of funds received from new investors.

    The SEC said ZeekRewards’ cash outflows would eventually exceed its total revenue if customers continued to elect to receive cash pay outs rather than reinvest their money to reach higher levels of rewards points. Last month, the company brought in about $162 million, while total investor cash pay outs were about $160 million.

    ZeekRewards has paid out almost $375 million to investors and holds about $225 million in investor funds in 15 foreign and domestic financial institutions, the SEC said. Those funds will be frozen under the emergency asset freeze granted by the court at the SEC’s request

    MY FIRST POINT:

    QUOTE “The SEC alleges online marketer Paul Burks of Lexington, N.C., and his company, Rex Venture Group, raised the money through the web site ZeekRewards.com, which they began in January 2011.”

    – We know this is not true because ZeekRewards.com is a creation built on the success of Rex Venture Group which has been trading successfully for many, many years. The online stores, the products, the marketing structures and the legal research for ZeekRewards was well in place before affiliates (like you and I) were brought into it.

    MY SECOND POINT:

    QUOTE “Mr. Burks agreed to settle the SEC’s charges against him without admitting or denying the allegations. He agreed to pay a $4 million penalty and relinquish his interest in the company.”

    – How does it make sense that Mr Burks would be forced to pay a $4 million penalty without even putting up a fight, or, at least, explaining himself publicly (keep in mind this has all happened in an amount of hours… why not weeks or months like a normal investigation would)? How does it make sense that the SEC would accept a $4 million pay out from someone who could possibly owe so many people so much money? The SEC claim that it is in their interests to protect investors and consumers. But instead of having a proper investigation and assuring that all available funds from Mr Burks would be paid to the so called ‘scammed investors’, they accept a $4 million pay out without even going through a proper court case!

    MY THIRD POINT:

    QUOTE “According to the SEC’s complaint, customers were offered several ways to earn money through the ZeekRewards program, two of which involved purchasing investment contracts that weren’t registered with the SEC.”

    – This is food for thought. Doesn’t it seem strange that such an established company and business would be operating for so long without complete SEC approval? One can only wonder what the SEC mean.. which two purchasing investments weren’t approved by the SEC? And how relevant were they? If so many people weren’t making so much money, would they really have cared?

    MY FOURTH POINT:

    QUOTE “the SEC said the company’s web site fraudulently conveyed that the company was extremely profitable when instead most of ZeekRewards’ revenue and the net profits paid to investors were composed of funds received from new investors.”

    – This is a very strange statement. In fact, it is made very clear on the ZeekRewards.com web site that up to 50% of sales profits were shared amongst qualified affiliates and that there is no guarantee of income what so ever. People who sign up are made aware that all profit shares are based on the sale of products from promoted Penny Auction online stores. It does not make sense that affiliates would be paid any more than their share of the profit made from the product sales at these Penny Auction web sites (but this is what the SEC claims has happened). Why would ZeekRewards.com pay their affiliates money from outside of their obligations (eg. Funds received from new investors.)? It only makes sense that the affiliates would be paid/granted points based on their fair share of sales profits. After all, that is all that ZeekRewards.com are obligated to pay, as described in their legal agreements.

    MY FIFTH POINT:

    QUOTE “The SEC said ZeekRewards’ cash outflows would eventually exceed its total revenue if customers continued to elect to receive cash pay outs rather than reinvest their money to reach higher levels of rewards points.”

    – This statement does not make any sense because the cash pay outs are based on a profit share of the sale of products from the Penny Auction’s web sites, not from the investments made by the qualified affiliates. It would not make sense that ZeekRewards.com would pay affiliates based on the income raised from other qualified affiliates. They don’t have to. They never promised that, nor did they promise any income to qualified affiliates from anything other than a share of the profits from sold items at the Penny Auction web sites.

    MY SIXTH POINT:

    QUOTE “Last month, the company brought in about $162 million, while total investor cash pay outs were about $160 million.”

    – What’s wrong with that and where did they bring in the ‘$162 million’ figure? This is the only figure of the income of ZeekRewards.com that is specified. Rather strange. And if the pay outs were $160 million then where is the evidence of fraud or scamming? If they were scamming why would the qualified affiliates be receiving so much money? Did the SEC include the profits from Penny Auction product sales? The figures provided here seem rather selective. There have been no complaints from any qualified affiliates of ZeekRewards.com. Where did the complaints come from? Perhaps we will see very soon and I am sure that they will either make no sense (like the rest of this story and many other stories), or they will be fabricated? The fact is that no one who has invested any money in this scheme has been left short until now, when the scheme has been brought down by the SEC.

    MY LAST POINT:

    QUOTE “ZeekRewards has paid out almost $375 million to investors and holds about $225 million in investor funds in 15 foreign and domestic financial institutions”

    – There is nothing wrong with this. $225 million in investor funds seems like a reasonable figure considering the level of investment in ZeekRewards.com world wide over the last 18 months or so since the scheme started. It is stated that $375 million has been paid out to investors. There is no link between the two figures mentioned here but it is inferred that there is a link, and that it is the only link. What is not mentioned are the profits from product sales which make this business so viable and legitimate. And the proof is clear when you consider the thousands of sales made every day and every week through ZeekRewards.com and their Penny Auction web sites.

    This stinks, and it is absolutely clear, from the start of the scheme to the end, that there is and was no scam. There was just a very smart way of making lots of money very quickly outside of the traditional means. And what monopoly would allow that?

    So here we have it. What a shame. Congratulations to all those who were able to take advantage of this business during its short life. Nobody was ripped off. Many affiliates made lots of money and many consumers found lots of bargains. There was never a proper investigation and there was no proper court case. This was simply brought down and we may never know the absolute truth behind why this happened. But I think it should be clear, to all who open their minds and look, that big money only belongs in the hands of a few.

    Please share this article.

  33. To all Zeekers! From my heart to yours…. Use this as a story in your in your next venture. Our pains & hurt help others to identify themselves to us as people looking for success. Winners sometimes fall, but they ALWAYS GET BACK UP!!!

  34. Investors are very worried about this foolish decision of SEC. Now Govt. should solve the problems and need full done for investors.

  35. well! if something fails, just get up shake it off and look for another venture. Just like a job, when you loose a job are you going to stop working? There are many good businesses and ventures out there and many many great companies. Choose what you like and make it happen again.

    Henrik
    Organo Gold

  36. I?m a Zeek Rewards Affiliate with only a small position of $400 and I recruited 3 people and we presented to one of my Downline friends 3 days ago and was about to have 15 people join because they could see the Model Working. Our message was only buy as many Sample Bids as you could afford and would not be upset if one day it went pair shape.
    I personally would like to see Zeek survive as it gave many people hope for their future after having their investments ripped apart by the GFC and other greedy “Wall St” barons. Now it?s the Taxpayers who are footing the Bill and the perpetrators are basking in glory.
    I think Zeek has probably grown too quickly and could it be the Banks and other financial instructions saw a whole lot of people playing the banks game and them losing control over the masses with their lending policies that change depending on where they want us to be. Imagine a whole lot of Zeekler?s paying back their mortgages in half the time, not good for the banks.
    I just wish that some of the Affiliates with massive point pool had taken some of the cash out earlier instead of going around bragging about the point accumulated. I don?t feel sorry for them as they have been greedy and not operation within the spirit of the game
    If Zeek had 1,000,000 Affiliates and 10,000,000 customers that?s a lot of people to market to and a small slice of all that activity would have been good. If Zeek can survive I hope they come up with a more realistic income plan that requires some work and the profits from the Auction and other customer related activity provides the profit to be shared.
    Unfortunately it will be very difficult to achieve as for once the site is back so many people are going to want to cash out and kill the Golden Goose. Whatever happens a lot more transparency and information needs to flow and Affiliates need to be compliant and not so greedy.

  37. Hello everyone,
    I understand the pain, frustration and bewilderment of all those “investors” (I use the term investor, because that is how it is mentioned elsewhere), but at the risk of being mistaken, I think that it is once again a bad that will turn into good for the health of our Network Marketing Industry.I think that it is once again a bad that will turn into good for the health of our Network Marketing Industry. A few weeks ago, I studied the Zeekreward business plan, because some of my entrepreneurs in Russia asked me for the relevant information. And, frankly, I do not understand the meaning of this company! Or at least it was nothing like what I have learned and shared over the past 20 years! In short, I perceived is as something that has nothing to do with network marketing.

    I don?t know if one day we would find out the denouement of the Zeekreward story, I don?t know whether the original concept of its founders was fair or not. But what I do know is that, away from the country of its origin, in a far-away Russia, the way “investors” are using this concept, it simply looks like an unhealthy pyramid.
    When I asked our lawyers about the business plan, I almost immediately got a reply, “it could stop at any moment.” And that is what I passed on to our entrepreneurs.

    To succeed, to achieve a success, using only computer keyboard, without communicating with other people, – it makes no sense from the point of my culture of Network.
    Hence my confusion and questions that arise as to the regular promotion, which Ted made of this company on his website.
    And this comment Kevin Thompson made is just fantastic, as it puts everything in its place. Thank you!
    I am proud of my profession and the network marketing industry. And I am actually glad that there is such a “barrier” preventing too many pyramids from completely tarnishing the reputation of one of the best professions in the world.

    And if for some people Zeekreward is now in the past, I recommend that these “investors” turn to a real network marketing company and learn how to create a real network of people, with a dream team that will stay with you no matter what happens. This is the biggest “security” that you can create in your life and in the lives of your children.

    Below you can see my comments and those of Kevin Thompson, translated into Russian!

    Eric Clerc

  38. Let’s put emotion aside for a moment and look at reality, shall we?

    Bottom line – how many of the people who got involved with ZEEK would have spent $1/bid if there were no “income opportunity” connected to it? (Much less the $99/month) Answer: Almost nobody.

    And how many of the people who earned those big checks we heard about ever took their money out instead of rolling it over into more bids? Answer: From the zeekers I’ve talked to, almost nobody.

    The truth is, unless people are happy with the “end product” (or service) from a networking company, REGARDLESS of whether they ever earn a dime, the model is unsustainable. With ZEEK, at least 95% of the $ that came to the company was from people hoping to make more money – only a tiny % was from people who actually wanted the end product. (bids or online shopping) Unfortunately this is true with most networking companies – it’s just more obvious here…

    Happy customers are the key to the long term residual incomes that people are looking to create in MLM – PERIOD… Does it take some time to build such a customer base? Yes. Is it worth it? Each of us must decide that for ourselves.

    ZEEK reps often do not want to look at the fact that any “income” here came from newer members losing their money. Only a very tiny fraction came from the internet sales to end customers. That is the definition of a Ponzi, no matter how you like to dress it up.

    Get honest with yourselves and find a company with a product that is a great value to the end user. This is still a great industry and if we learn from our errors we can help a lot of people.

  39. according to my point of view SEC take wrong decision about zeekrewars company its 100% good and payable compay i have already earn through this company against add posting work
    i request that please reopen this site
    vijh, sargodha, paksitan

  40. tout ce que ja peux dire c’est que SI VRAIMENT PAUL BURK QUI EST LE PROMOTEUR DE CE BUSNESS VEUTTT , ALORS IL CONTINUERA SON BUSNESS et nous les affiliés, nous serions ravie.Je dis ca pôurquoi??par ce qu’il ya plein de polémique autour de cette affaire , les gens disent n’importe quoi sans tenir compte de nos rêves qui ont été brisés et de notre actuel état de coeur qui est si triste.puisque j’ai lu un article disant que le procureur de caroline du Nord a nié que FBI a fermé les portes de ZEEK. plutot ils disent que c’est ZEEK qui aurait déliberement fermé ses portes.Je sais que paul Burk est un homme de foi qui a l’amour paternel en lui.alors s’ils n’ont pas délibérement fermés ZEEK, je SUIS CERTAINE QUE PAUL BURK FERA TOUS LES FEFFOTS POR ROUVRIR LES SITES DANS LMES PROCHAINS JOURS.je suis sure que ca marchera..moi je ne me fais meme pas les idées concernant la fermeture de ZEEK.Il suffit seulement que le PGD paye les ammendes que le service sercret lui demande de payer.Même si c’est pour sortir l’argent de notre back office pour payer ces frais et rouvrir l’entreprise, les affiliés seront content.là, lors de la rouverture ZEEK bloque les retraits pour un temps.cela ne nuirait je crois à personne.Moi je prie beaucoup pour tous les parents agées qui ont faits des investissements sans jamais touché à un seul retrait.Je suis surrrrrre que ZEEK REVIENT BIENTOT.par la grace de JEHOVAH , ZEEK reviendra et nous tous , nous reprendrons nos busness.soyons un peut logique et prenons un exempkle: lorsque vous avez par exemple une boutique, si vous n’êtes pas reglo avec l’état(soit pour paiement d’impôts etc…) alors l’état vient sceller votre boutique en vous imposant des penalités supplémentaires. Mais si payez à l’état ce qu’il vous demande, alors il rouvrira votre boutique.j’ai pris cet exemple simplement pour dire que si ZEEK est scellé pour des raisons reglémentaires , alors, il rouvrira après avoir payer les pénalités.JE SUIS CERTAINE QUE SI LE P.D.G N’A PAS VOLONTAIREMENT FERME ZEEK , ALORS, IL OUVRIRA A NOUVEAU SES PORTES PAS PLUS TARD QUE LA SEMAINE PROCHAINE. alors “TOUS ENSEMBLES EPAULE CONTRE EPAULE ET MAIN DANS LA MAIN POUR SOUTENIR PAUL BURK , LES EMPLOYES , LES AFFILIES DE ZEEK POUR UNE ROUVERTURE IMINENTE, prions Dieu Pour cela. AMENNNNNNNNN!!!!!!!!!!!!!!!!!!!”"Les gens qui disent que zeek prenait l’argent des nouveaux pour payer les anciens affiliés , vous mentez !!! je dis bien que vous mentezzz!!! Qui parmis les gens qui mal parlent de zeek s’est inscrit à zeek et après une semaine , il a essayé de faire des retraits et ce n’est pas sorti??????????????? qui parmis vous???????????NE DITES JAMAIS CE QUE VOUS NE CONNASSEZ PAS.S’il arrive que le FBI me demande de prouver où je me suis inscrits et une semaine après j’ai fais le retrait , je le prouverai.Pas un compte , ni deux. donc ne dites pas ce que vous ne connaissez pas . zeek c’est une entreprise merveilleux du MLM que je n’ai jamais vu de toute mon existence et je prie beaucoup pour sa reouverture.

  41. The faster way is to ask your friend or his friend in your Zeek upline to pay you back from there profits. The receiver has a list of all those who received the $300million plus paid out I assure you they will all be paying the money back, cars, houses, and other stuff the money was spent on. Its a simple call. If they refuse you take action and file a small claims suit. really easy to do. Most small claims suits will also lead to criminal charges since sec won the Ponzi charges here against Zeek. The IRS would love a courtesy call to for those who been bragging how much money they made in Zeek. IRS has a rewards program for whistle blowing too. Call the credit card company explain to them the deal with sec and you will win back the monthly charges.

  42. I was paying $1,730.00 for an office space of 768 sq feet in Coral Springs. I found Zeek in late November 2011. In July 2012 I had 140000 points balance. I was well on my way to becoming a millionaire. The SEC stepped in and ended my dream in a matter of minutes.
    Thanks SEC
    Keep up the good work.Go ahead and keep destroying other people’s lives. Do what you do best.
    Burk last payment was $162 million and He had $160 million at hand.
    What was so wrong about that?

  43. Burks will return all of my VIP Balance + all VIP Points that I ve missed for 2 years SEC must promise, didt they?

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