The U.S. Securities and Exchange Commission (SEC) has accused a Chinese asset management company of defrauding hundreds of investors by falsely claiming that the company was about to go public, and defrauding investors of up to $6 million.
Investment Scam: Falsely Claiming to Get High Remuneration Using AI
According to the SEC’s indictment, a Chinese asset management company is currently suspected of defrauding hundreds of investors out of as much as $6 million. The asset management company and its CEO lied to investors and customers that the company used its own proprietary AI technology to help customers earn huge profits every week. At the same time, we promise to provide 100% protection for customer funds.
In addition, the SEC also alleged that the defendants also falsely claimed to clients that their company had applied for listing on the Nasdaq Stock Exchange and had received support from a number of well-known financial institutions and law firms. They also claimed that they were currently actively communicating with relevant SEC personnel. among. However, the SEC alleged that these messages were all exaggerated and false in order to attract more investors.
SEC strongly condemns using government name to defraud
The SEC added that the company also exaggerated corporate documents filed with the SEC to attract customers to deliver funds to the company. The indictment states that these frauds involved a global multi-million dollar fraud scheme. After the company defrauded funds, it cut off any contact with customers and closed the company's website, making it impossible for customers to inquire and manage their financial status.
Jason J. Burt, Director of the SEC's Denver District Office, said: "The defendants' abuse of the SEC's filing process to defraud investors in the United States and around the world is outrageous. We will continue to pursue those responsible for this type of fraud, including those who abuse and misrepresent themselves. The SEC said the defendants violated the anti-fraud provisions of the federal securities laws and sought a permanent injunction, disgorgement of ill-gotten gains and civil penalties.
In fact, this is also very common in the cryptocurrency industry. Many SEC's voluntary declaration forms are "reporting" functions. The SEC will not actively review and supervise, but it has the power to govern; therefore, many overseas companies (not even operating in the United States) will Report to the SEC through a similar process, and then brag to customers that it is an SEC-compliant company.
Pre-IPO Investment Fraud Risks and Warnings
The SEC reminds investors to be wary of stock subscription scams that claim to provide "Pre-IPO". These scams may be promoted through social media, websites, phone calls, emails or face-to-face.
Many stock promoters lure potential investors with the promise of high returns, but in reality, there are significant risks involved and may result in losing all your money. These companies are not in good health and their stock prices may not rise or may even never go public, leaving investors unable to resell their shares.
In addition, most pre-IPO investment companies are not certified and registered by the SEC, and the issuance of shares of these uncertified and registered companies would be deemed to violate federal securities laws. Scammers may also take advantage of SEC-certified investment opportunities and use false or misleading statements to lure investors. The SEC warns that investors need to carefully study any investment targets, especially those that claim to be risk-free or can bring high returns, and that often promote companies with "cryptocurrency, blockchain or artificial intelligence (AI)" as their main business. stocks to attract investors.
How to avoid falling victim to Pre-IPO investment scams
Confirm company registration status: Before any investment, including the purchase of Pre-IPO stocks, investors need to confirm whether the seller is registered with a government agency or holds a legal license. You can make inquiries using free resources provided by the SEC.
Be wary of forced sales: Fraudsters may set up "customer service centers" or use social media for promotion, using high-pressure sales tactics to attract investors. Investors should avoid being pressured into making hasty investment decisions.
Stay rational: Investors need to stay rational. Scammers often use hot topics such as cryptocurrency or AI to attract audiences. Don’t invest blindly just to follow the trend.
Stay vigilant: Investors need to be vigilant. Scammers may use flashy websites or statements to attract investors. Please do your homework first.
This article turns financing scam into crazy AI! A Chinese asset management company deceived itself into listing, and SEC enforced the law to recover US$6 million. The post appeared first on Chain News ABMedia.
