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As I listen to all the experts and people saying their lawyers say that Zeek Rewards was never a Ponzi,  and how Ira Sorkin’s filing said Zeek was not a security, we have this from the SEC filing:

Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act define a “security” to include an “investment contract.” In Howey, the Supreme Court has defined an “investment contract” as: (1) the investment of money; (2) in a common enterprise; (3) with an expectation of profits to be derived solely from the efforts of the promoter or a third party. Howey, 328 U.S. at 298-99. The Howey test is a “flexible” principle “capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” SEC v. Edwards, 540 U.S. 389, 393 (2004). The Supreme Court has explained that Congress intended the application of the Securities Act and Exchange Act “to turn on the economic realities underlying a transaction, and not on the name appended thereto.” United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 849 (1975).   11

11 This principle applies with equal weight to ZeekRewards’ use of the term “affiliate” rather than “investor,” and the assertion in promotional materials that ZeekRewards was not an “investment.” As explained in detail herein, the “economic reality” is that the ZeekRewards scheme was an investment, and ZeekRewards affiliates were investors.

Courts have applied the Howey test to define a wide range of Ponzi schemes, pyramid schemes, and multi-level marketing schemes, including internet-based schemes, as securities.

Here, the Retail Profit Pool and the Matrix meet all three elements of an investment contract as defined by Howey.

Further in the filing, the SEC states how Zeek Rewards meets all 3 requirements of the Howey Test, and

First, Proposed Intervenors do not dispute that ZeekRewards affiliates had an expectation of profits.

Second, ZeekRewards affiliates not only had an “expectation of profits,” they also clearly relied on the predominant managerial “efforts of others” – Burks and Rex – to generate those profits.

I recommend that you read the entire filing (Doc 113) as it spells out the SEC’s jurisdiction, as well as giving us a glimpse of things to come. In line with previous SEC filing in this case, make note of footnote 2 (emphasis added):

2 The Commission’s ability to respond to the Motion to Intervene is limited by the confidential nature of the Commission’s ongoing investigation. If the Court is inclined to grant the Motion, the Commission respectfully requests an opportunity to provide the Court with additional information under seal or in a closed hearing.