The Scams are Getting Dumber and So Are You
- Joshua M Brown
- August 18th, 2012
Sorry, how else to explain why this redneck with a one-year-old website was able to launch a $600 million ponzi scheme? $600 million, I said. You could buy the Tampa Bay Buccaneers for $600 million, just to put the enormity of that number into context.
Anyway, here goes...
The U.S. Securities and Exchange Commission said it shut down a $600 million online Ponzi scheme on the verge of collapse and won a court ordered emergency asset freeze to protect some of the more than 1 million investors it had attracted.
ZeekRewards.com, created in January 2011 by Paul Burks and touted as a "private, invitation only, affiliate advertising division" of penny auction website Zeekler.com, promised investors up to 50 percent of "daily net profits" through a system based on rewards points, the SEC said.
The regulator said this created a false impression of "extreme" profitability, when in reality 98 percent of revenue and so-called net profits paid to earlier investors came from newer investors.
U.S. District Judge Graham Mullen in Charlotte, North Carolina issued an emergency freeze on Friday on the $225 million of investor funds that ZeekRewards still holds at 15 U.S. and non-U.S. financial institutions, and which were at "imminent" risk, court records show.
Oh my god. What the hell is wrong with you people? Can't even blame Wall Street for this - Burks probably referenced Facebook in his con pitch.
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The Reformed Broker is a blog about financial markets and the economy. Joshua Brown is a New York City-based investment advisor for high net worth individuals, charitable foundations, retirement plans and corporations... More.