The SEC Stops Penny Auction Like Site 'zeekrewards' for Alleged Major Ponzi Scheme Reports Pennytime.com

San Francisco, CA -- (SBWIRE) -- 09/12/2012 -- Federal regulators have announced that the fraud charges were put on Friday against a company they said was operating a $600 million Internet Ponzi scheme “on the verge of collapse”

ZeekRewards is a companion to the penny auction site Zeekler.com. Visitors to the ZeekRewards site were told that they will be paying a subscription fees and become affiliates of the company.

The Securities and Exchange Commissions accused ZeekRewards.com, its parent company Rex Venture Group, and Rex Venture head Paul Burks of luring more than one million investors worldwide.

The scheme began in 2011 and the SEC said that the pay-outs that the company made came from the funds of new investors.

"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," the SEC's Stephen Cohen said in a written statement.

The SEC has now effectively frozen around $225 million in investor funds that remain in the company’s bank accounts in order to return the money of the victims as much as they can.

ZeekRewards has paid out some $375 million to investors, while Burks allegedly has been able to make millions for himself in the process.

Burks has agreed to settle the SEC case without admitting or denying wrongdoing by paying a $4 million penalty and forfeiting his stake in the firm.

Lawyers for Burks and Rex Venture have not been returning any phone calls and have not been available to comment on the case.

The SEC can still pursue civil charges and Burks could still face further charges from the subsequent criminal investigations.

About PennyTime.com
PennyTime.com (http://www.pennytime.com/) is a leading penny auction website that is reliable and guarantees its users the opportunity to win their favourite items through biding online and interactively participating in the whole system.