Former affiliates Trudy Gilmond and Kellie King have engaged Ira Sorkin, a notable former federal prosecutor in Manhattan and former SEC regional administrator, in their defense. Sorkin is perhaps best known for representing Bernard Madoff.

Their motion to intervene, filed Friday December 14 by Sorkin’s team, challenges the SEC’s jurisdiction along with all subsequent actions of the receiver because there were no securities involved to begin with. “What the SEC purports are investment contracts are nothing more than contractual rights entitling independent contractors to a share of a company’s profits in return for their efforts in promoting the company” according to the motion. “Because there is no security to justify the SEC’s jurisdiction in bringing this action, the individual appointed at the SEC’s request must be relieved of his duties, and the clawback suits must not go forward.”

Zeek Rewards collapsed earlier this year, a massive online Ponzi scheme involving about $660M and a million participants in 100 countries. Gilmond and King are two of the approximately 1200 “winners” being targeted by the receiver’s Ponzi clawback action. Gilmond and King’s profits taken together come to about $1,573,000, according to court filings.

(Davidson County, North Carolina Dispatch at www.the-dispatch.com)