UPDATE: Judge Grants Zeek Receiver’s Request To Treat Preliminary Liquidation Plan As Ponzi Case’s First Status Report

Senior U.S. District Judge Graham C. Mullen has granted the request of the receiver in the Zeek Rewards Ponzi scheme case to treat the preliminary liquidation plan filed Oct. 8 as the first status report in the case.

Receiver Kenneth B. Bell said earlier this week in court filings that the request, if granted, would save money. Mullen approved the request in an order today.

The development means that Bell, who is in the process of issuing subpoenas to a first round of about 1,200 Zeek members believed to have been the biggest winners, will not be required to file another status report until the end of January.

Potentially “thousands” of subpoenas to other Zeek members who took out more than they put in will follow the first round of 1,200, Bell said in a statement Oct. 30. (See Oct. 31 PP Blog story.)

The SEC has described Zeek as a $600 million Ponzi- and pyramid scheme. Among other things, status reports inform judges about efforts to recover fraud proceeds and return them to victims. In the Zeek case, status reports from the receiver are due within 30 days of the close of a calendar quarter.

See Bell’s Oct. 8 preliminary liquidation plan. (Courtesy of ASDUpdates Blog.)

In September, the SEC said its Zeek probe was ongoing.