Dated March 15, 2023, in Washington, DC:
A charge on Miles Guo
The SEC charged Miles Guo, a Chinese billionaire who lives in exile, and his financial advisor, William Je, with fraud and securities violations related to unregistered offers that raised more than $850 million.
The Securities and Exchange Commission says that between April 2020 and the present, Guo, who is also known as Ho Wan Kwok, Miles Kwok, Wengui Guo, and Brother Seven, and Je, who is also known as Kin Ming Je and has been his longtime financial advisor, stole a large part of the money raised from investors to enrich themselves and their family members, who are named as relief defendants in the complaint.
For example, it is said that Guo and Je sent $100 million to a hedge fund for a company owned by Guo’s son in connection with a private placement sale of common stock in GTV Media Group, Inc. (GTV). Another $3.5 million was used to buy a Ferrari for Guo’s son, and about $40 million was used to buy and refurbish a property in New Jersey, all using money that was stolen from investors in two earlier offerings, according to the lawsuit.
The SEC has filed charges against Guo and two other companies for securities law breaches related to these offers: G Club Operations LLC of Puerto Rico and New York and Mountains of Spices LLC of New York. A fourth offering, for which Guo is solely responsible, was a crypto asset security known as “H-Coin,” “Himalaya Coin,” or “HCN” and a linked putative stablecoin that collectively raised hundreds of millions of dollars from investors.
Since at least October 2021, Guo is also accused of making fraudulent statements to anyone interested in investing in H-Coin. These include claims that 20% of H-value coins were backed by gold and that Guo would compensate investors for any losses.
Gurbir S. Grewal, Director of the Securities and Exchange Commission’s Division of Enforcement, stated, “We allege that Guo was a serial scammer who raised more than $850 million by promising investors outsized profits on purported crypto, technology, and luxury investment prospects.” To support his extravagant lifestyle and that of his family, Guo “took advantage of the excitement and attraction around bitcoin and other investments to victimize hundreds.
In its lawsuit against Guo and Je, the SEC wants permanent injunctions, the return of illegal gains, civil penalties, and a ban on Guo and Je serving as officers or directors. In addition to monetary damages, the Securities and Exchange Commission wants to get an injunction based on Guo’s actions that would stop him from issuing, buying, offering, or selling any securities, including crypto-asset securities, for anyone else’s benefit.
Today, charges were also announced against Guo and Je by the U.S. Attorney’s Office for the Southern District of New York.
In September 2021, the SEC filed charges against GTV and two other organizations for selling GTV’s common stock without being registered to do so. GTV and its parent company were also charged with selling G-Coins or G-Dollars without being registered to do so.
With the roughly $70 million that had been moved to the hedge fund mentioned above, the SEC was able to get from GTV and two other charged companies a total of $454 million in disgorgement, prejudgment interest, and penalties. Investors who suffered losses will receive compensation from the SEC.
William Conway, Amanda Rios, Kerri Palen, Daniel Loss, and Sandeep Satwalekar are continuing the SEC’s probe. Thomas P. Smith, Jr., is in charge of overseeing this case. Mr Loss, Mr Conway, and Ms Rios will be in charge of all litigation for the Securities and Exchange Commission
The SEC would like to thank the United States Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and a number of foreign regulatory agencies for their help.