The U.S. Securities and Exchange Commission said it shut down a $600 million online Ponzi scheme on the verge of collapse and won a court ordered emergency asset freeze to protect some of the more than 1 million investors it had attracted.

ZeekRewards.com, created in January 2011 by Paul Burks and touted as a 'private, invitation only, affiliate advertising division' of penny auction website Zeekler.com, promised investors up to 50 percent of 'daily net profits' through a system based on rewards points, the SEC said.

The regulator said this created a false impression of 'extreme' profitability, when in reality 98 percent of revenue and so-called net profits paid to earlier investors came from newer investors.

U.S. District Judge Graham Mullen in Charlotte, North Carolina issued an emergency freeze on Friday on the $225 million of investor funds that ZeekRewards still holds at 15 U.S. and non-U.S. financial institutions, and which were at 'imminent' risk, court records show.

The SEC said Burks, 65, lives in Lexington, North Carolina, and is the sole owner of co-defendant Rex Venture Group LLC, which controls ZeekRewards and Zeekler.
Burks agreed to settle without admitting wrongdoing and agreed to cooperate with a court-appointed receiver, the SEC said.

Noell Tin, one of the lawyers for the defendants, declined to comment.

According to the S.