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SEC charges Warner Technology consultant for violating US securities laws

The US Securities and Exchange Commission (SEC) has sued a New Jersey-based Huakang 'David' Zhou and his consulting firm Warner Technology and Investment for violating securities laws.

The market watchdog claimed that Zhou and his consulting firm cheated some investors and helped over 20 private Chinese companies gain access to the US capital markets through reverse mergers.

According to the complaint filed in US District Court for the Southern District of New York, Zhou committed various offenses including non-disclosure of certain holdings and transactions to outright fraud.

SEC’s New York Regional Office director Andrew Calamari said, "Zhou and his firm sought to take advantage of our financial markets by propping up some Chinese issuers with the sole purpose of enriching themselves at the expense of U.S. investors."

The complaint charges Zhou for control person liability and aiding and supporting violations of Section 10(b) and 15(a) of the Exchange Act, and Rule 10b-5(b), among other regulations.