The Securities and Exchange Commission (SEC) exposed Zeek Rewards as a $600 million Ponzi scheme. A central myth debunked was the company's claim that its daily return on investment (ROI) came from "up to 50% of daily net profits."

Zeek Rewards affiliates used this profit claim to attract new investors. Many believed their daily payouts stemmed from real sales to actual customers. The SEC's investigation of "hundreds of thousands" of Zeek Rewards documents found otherwise. The dividend, the agency stated, had no relation to the company's net profits. Paul Burks, the company's founder, instead decided the daily dividend rate himself. He set it to average around 1.5% per day, creating a false sense of profitability for investors.

Burks simply entered a daily ROI percentage by hand. This figure had nothing to do with genuine sales revenue. Its only purpose was to keep investors content, meaning they received enough over 90 days to maintain their Ponzi point balances. This detachment from actual net profits, 98% of which came from affiliate funding, led to Zeek Rewards paying out $162 million in July 2012. It only took in $160 million that same month.

A few more months would have seen payouts exceed new investments, causing the scheme to collapse on its own. This likely explains why Paul Burks, Zeek's CEO, chose to settle with the SEC instead of denying he ran a Ponzi scheme. Analysts watching Zeek Rewards before the SEC shutdown already saw the daily ROI had no link to the company's revenues.

During outages of both Zeek Rewards and its penny auction, Zeekler, the daily ROI to affiliates remained steady. If both platforms were down for over 24 hours, no revenue from bid sales or other sources would enter the company. Still, the daily ROI paid to affiliates stayed consistent, within a few decimal percentage points. Sometimes, the daily ROI paid was double what it should have been. This strongly suggested manual entry of the ROI percentage, contradicting claims it was tied algorithmically to Zeek's daily profits.

These observations continued, but Zeek Rewards management always dismissed inquiries about the ROI generation as a "proprietary secret." The SEC's findings confirmed what many suspected: Zeek's daily ROI came from Paul Burks manually adjusting a slightly different percentage each day to pay affiliates.