Claims Administration for SEC-Appointed Receiver

Zeekrewards.com

Situation

ZeekRewards.com (“Zeek”), run by the Rex Venture Group (“RVG”), was a multi-level marketing business that ran a penny auction website and incentivized participants to give away “Sample” or “VIP” bids to attract new customers to its site and share a percentage of the company’s daily profits. In August 2012, the SEC shut down Zeek for offering unregistered securities.⁴ When the Receiver was appointed, he found boxes of cashier’s checks along with no books and records.

Our Role

Assisted in the development of an online claims portal to allow Zeek participants to assert claims for funds lost in the scheme (online portal maintained by Garden City Group, now Epiq). This portal allowed for global intake, proof of claim submission, claimant status checking, claimant tax validation, noticing requirements and facilitated general claims administration activities.
Developed automated claims reconciliation tool to allow for efficient claims validation.
Established an equitable model to handle the complex process of determining the percentage of reimbursement each claimant was entitled to and the amount they had already received.

Our Impact

Using advanced analytics and other techniques, FTI Consulting successfully recreated how the program worked, identified the way money flowed in and out of the company, and traced recoverable funds. Through careful, targeted analysis, FTI Consulting was able to recover the majority of losses, with minimal objections to the figures established.
Over the course of the Receivership, FTI Consulting issued over 650,000 checks totaling ~$371 million, meaning that victims that filed approved claims received 84% of their investment.

Footnotes:

1: Securities and Exchange Commission v. Rex Venture Group, ZeekRewards.com, U.S. District Court W.D.N.C. (Aug. 17, 2012).