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Sec Claims Zeek Rewards A Ponzi Scheme Is It True?
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Sec Claims Zeek Rewards A Ponzi Scheme Is It True?

On August 17, 2012, the SEC shut down the popular and very controversial Zeek Rewards website alleging the organization was involved in a $600 million dollar ponzi scheme. Chaos ensued, with members of that business wondering if they'll ever see their money returned and many wondering if the allegations are indeed true and what the future of this business is. But was the SEC correct in claiming Zeek Rewards to be a ponzi scheme?

The truth is we have yet to see, but it's no question the business was engaged in questionable and controversial methods of marketing itself. Although it has been around for over 14 years, with $0 in debt, the business depended mostly on having as many members as possible not only putting in as much money as they could in exchange for promised rewards, but also referring as many people as they could also in exchange for monetary rewards.

The business kept it's end of the deal and there were a lot of happy customers which makes one wonder if the allegations against it are sound, but let's examine it from a deeper point of view: The business's sole purpose is to get as many people as possible to join it. Why? Because it's members post ads for the company's sibling partner: Zeekler, a penny auction website.

The more members posting ads for the penny auction site, the more traffic it gets which means there is more potential for profits. The daily profits made by this auction site are divided evenly with Zeek Rewards which then takes 50% of what it earned and divides it amongst it's members who receive it in the form of point/bids which they can then redeem for money or keep in order to accumulate more points which would then lead to an even greater monetary return.

Looking at this from a basic point of view, most will look at this business model and say it's a pyramid scheme and the truth is, there is indeed a pyramid form of business in the works, but ponzi scheme? Only time will tell.

If what the company claims is true, then it can't be a ponzi scheme because there is real money coming from services being completed in the penny auction website, not just from investor to investor. But if what the SEC says is true, that means that this business will now be engaged in a long line of lawsuits, damage control marketing and tons of controversy.

Whether or not this company will be able to prove itself innocent is anyone's guess. One thing's for sure, they'll have a very hard time proving their case because Zeek Reward's business model is founded on very questionable methods. Either way things go, one thing is for sure, it will be many months before we'll know the truth.


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