U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23787 / March 23, 2017
Securities and Exchange Commission v. Dr. Keith Laggos, No. 3:17-cv-00150 (W.D.N.C. filed Mar. 22, 2017)
SEC Charges former ZeekRewards Promoter and Consultant for Unlawfully Promoting the Scheme
On March 22, 2017, the Securities and Exchange Commission charged Keith Laggos, formerly the publisher of the Network Business Marketing Journal (NMBJ), for his involvement in and unlawful promotion of the ZeekRewards fraudulent scheme.
The SEC alleges that, from at least June 2011 through July 2012, Laggos, through NMBJ and while acting a paid consultant for ZeekRewards, was paid at least $64,000 for publishing several editorials providing crucial publicity to the ZeekRewards scheme. These publications promoted ZeekRewards as the "company of the month" and touted, among other things, the scheme's supposed record earnings and opportunity to generate income for participants. Laggos failed to disclose the fact that he was paid for the favorable editorial coverage, the amount that he was paid, and that he was a paid consultant for ZeekRewards.
The SEC further alleges that Laggos's favorable editorials of the scheme contained material misstatements and omissions. Laggos published theses misstatements despite being made aware of their inaccuracy and otherwise being in a position-as a paid consultant for ZeekRewards-to know of their falsity.
The Commission's complaint, filed on March 22, 2017 in the U.S. District Court for the Western District of North Carolina, charges Laggos with violating Sections 17(a) and 17(b) of the Securities Act of 1933 ("Securities Act"). To settle the matter, Laggos, who previously consented to a permanent injunction against violating Securities Act Section 17(b) in a 2005 case, consented to the entry of a court order ordering: (i) Laggos to pay disgorgement, prejudgment interest, and a civil penalty totaling $79,190.68; and (ii) permanently enjoining Laggos from future violations of Sections 17(a) and 17(b) of the Securities Act, from participating in future securities offerings, and from providing paid publicity to securities.
The SEC's investigation was conducted by Brian M. Privor, Alfred C. Tierney, John J. Bowers, and Joshua Braunstein. The case was supervised J. Lee Buck, II.