Federal prosecutors say shell companies and false SEC filings were used to promote stock purchases that led to major investor losses
U.S. authorities charged a Hong Kong resident with filing false documents with the Securities and Exchange Commission (SEC) and participating in an international scheme involving multiple sham investment firms. According to federal filings, he and other collaborators created at least 10 shell companies and submitted fraudulent adviser forms that made the businesses appear legitimate. Investigators said some of these firms were then used to encourage investors, often contacted through WhatsApp and similar platforms, to buy shares in a NASDAQ-listed company, with assurances of unusually high returns.
Authorities allege that the man and his associates profited by selling the company’s shares through foreign brokerage accounts, ultimately generating more than $200 million before the stock lost nearly 90 percent of its value in April 2024. The SEC has filed civil actions against several of the entities involved, while the Department of Justice (DOJ) charged the man with conspiracy and making false statements in regulatory filings.
“[The] indictment charges the defendant for his alleged role in a complex securities fraud scheme that caused hundreds of millions of dollars in investor losses,” said Acting Assistant Attorney General Matthew Galeotti of the Justice Department’s Criminal Division.
As the Lord Leads, Pray with Us…
- For federal investigators and regulators as they probe the extent of the alleged scheme and seek to uphold fair financial practices.
- For officials at the DOJ and the SEC as they work to prevent bad actors from defrauding investors.
- For wisdom for U.S. and international personnel who provide financial oversight and accountability.
Sources: MSN, Cryptopolitan, Townhall
