(Micky) - Exiled Chinese businessman Miles Guo and his financial advisor William Je have been charged by the Securities and Exchange Commission (SEC) for their involvement in unregistered and fraudulent offerings that raised over $850 million.
The SEC’s complaint alleges that since April 2020, Guo and Je misappropriated a significant portion of the funds raised from investors for their personal enrichment and that of their family members, who are named as relief defendants.
The complaint cites instances of the exiled businessman Guo and Je diverting $100 million of investor funds to a hedge fund for the sole benefit of a company owned by Guo’s son, as well as misappropriating investor proceeds to fund Guo and his family’s lifestyle, including purchasing a mansion in New Jersey and a Ferrari for his son.
The SEC also charged Guo, G Club Operations LLC, and Mountains of Spices LLC for violations of the registration provisions of the securities laws in connection with these offerings.
Material misrepresentation against investors
Guo is further charged in a fourth offering that raised hundreds of millions of dollars from investors through a crypto asset security referred to as “H-Coin,” “Himalaya Coin,” or “HCN” and a related purported stablecoin.
Since at least October 2021, Guo has allegedly made material misrepresentations to prospective investors in H-Coin, falsely stating that 20 percent of H-Coin’s value was backed by gold and that he would personally compensate investors for any potential losses.
The SEC’s complaint seeks permanent injunctions against Guo and Je, disgorgement of ill-gotten gains, civil penalties, and officer and director bars. The complaint also seeks a conduct-based injunction that prohibits Guo from participating in the issuance, purchase, offer, or sale of any securities, including crypto asset securities, other than for his own personal accounts.
The U.S. Attorney’s Office for the Southern District of New York also announced charges against Guo and Je in a parallel action. The SEC’s continuing investigation is being conducted with the assistance of the U.S. Attorney’s Office for the Southern District of New York, the FBI, and multiple international regulators.
By Micky Contributer
March 22,2023
