Friday, July 10, 2015

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

SEC Charges Oil Company and CEO in Scheme Targeting Chinese-Americans and EB-5 Investors
July 6, 2015 (Litigation Release No. 141)
The SEC has charged CEO Bingqing Yang and her company Luca International Group for fraud. The SEC alleges that Yang gave presentations with falsely depicting a large, successful company. Yang allegedly used new investors’ funds, in a Ponzi-scheme fashion, to make payments to older investors. The SEC also claims that over $2.4 million of investors’ funds was used on a house purchase, a gardening/pool services, a vacation to Hawaii and personal taxes. Further the SEC alleged that Yang raised approximately $8 million from EB-5 investors and diverted funds for personal gain, leaving no realistic possibility of repaying back the loans since the loan was not fully secured and the Luca entity being funded was in debt. Hiroshi Fujigami and his company Wisteria Global have agreed to settle the SEC charges from acting as brokers and selling securities illegally to two Luca entities. Fujigami and Wisteria are required to disgorge the commissions of more than $1.1 million. Fujigami will be barred from the securities industry and from participating in any penny stock offering.

SEC Advisory Committee on Small and Emerging Companies to Hold Conference Call Meeting
July 8, 2015 (Litigation Release No. 142)
On July 15 at 1:00 p.m., the SEC’s Advisory Committee on Small and Emerging Companies will hold a public meeting by telephone conference to continue discussions regarding topics discussed on June 3 which are public company disclosure effectiveness and regulatory treatment of “finders” that assist companies in capital raising activities.

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