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This post is authored by Jordan Maglich, Forbes contributor, associate at Wiand Guerra King and creator of the Ponzi Tracker website.

In the wake of the SEC’s shutdown of ZeekRewards and the court’s appointment of a receiver, many have expressed frustration at the perceived lack of progress. In an apparent effort to “jumpstart” the recovery, at least one class action lawsuit has been filed by investors against ZeekRewards and Paul Burks. On another front, a group of Zeek affiliates appear to be soliciting “donations” from investors to fund litigation against the Securities and Exchange Commission in an effort to “reinstate” Zeek. While victims may mean well, it is likely that neither suit will yield any benefits.

When the North Carolina federal court appointed Ken Bell as receiver, it issued an “Order Appointing Receiver” (the “Order”) that spelled out Mr. Bell’s duties and responsibilities. Among these, Mr. Bell was directed to marshal and preserve all of Zeek’s assets. Additionally, the Western District of North Carolina was designated as the exclusive forum for any claims brought against Zeek or Burks. Besides giving Mr. Bell the sole authority to bring claims on behalf of the receivership entities, Paragraphs 32 – 34 of the Order also specifically stayed any litigation involving the Receiver, Receivership Property, the Receivership Entities, or previous employees. Courts in which those actions are filed must defer to the exclusive jurisdiction of the Western District of North Carolina before proceeding.

The Receiver also brought this up during his conference call with various members of the media today. I was fortunate enough to be permitted to listen. While stating that he had not been provided with any copies of the filed lawsuits, Mr. Bell alluded to the court-imposed litigation stay, opining that the stay likely encompassed those actions. Mr. Bell’s viewpoint is likely shared by Judge Mullen, as receivership courts do not take lightly to encroachments on their jurisdiction. If you’re wondering what a court-imposed “Stay” means, it’s a ruling by the court that halts further legal process in a case.

During the conference call today, Mr. Bell was clear that he intended to recover every possible source of funds for eventual return to victims, and the existence of competing litigation for these funds is not likely to sit well with both Mr. Bell and the federal judge presiding over the case. In addition to the unambiguous language in the Order, principles of equity also require that a small group of investors should NOT be allowed to essentially “leapfrog” the rest of investors to recover funds that rightfully belong to the receivership estate. The goal of a receivership is to treat similarly-situated victims alike, and allowing some investors to recoup a larger part of their total investment than others is contrary to this vision. If people are encouraging you to “unionize” and demonstrate “strength in numbers,” it’s certainly within your rights. However, I feel it will not yield any meaningful benefits that you are not already entitled to receive.

In short, investors are urged to have patience as Mr. Bell completes his initial investigation. A court is very unlikely to allow outside litigation to proceed that has the professed goal of enriching some investors to the detriment of others. Additionally, any funds recovered from Zeek Rewards and/or Burks are the property of the Receivership Estate for the benefit of all victims, and not just a select subset. Victims must simply sit tight while the receiver’s investigation continues and stay tuned for future updates.

In a future post, we’ll explain the likelihood of Clawback Litigation against some of the investors that actually profited from the program. Based on the receiver’s comments, it seems possible that Ken Bell will pursue this avenue to bolster the cash accounts at Zeek. In the meantime, if you have not done so already, please subscribe to receive our email updates.