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Showing posts with label CHINESE REVERSE MERGER COMPANY. Show all posts
Showing posts with label CHINESE REVERSE MERGER COMPANY. Show all posts

Wednesday, May 22, 2013

FINAL JUDGEMENT IMPOSED IN INTERNAL CONTROLS CASE

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION

The United States Securities and Exchange Commission announced today that the Honorable Ronnie Abrams of the United States District Court for the Southern District of New York entered a final judgment against defendant Ren Hu on May 17, 2013. The final judgment imposes on Hu a permanent injunction against future violations of Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5, 13a-14, and 13b2-2 thereunder, and further from aiding and abetting violations of Section 13(b)(2)(B) of the Exchange Act. The final judgment also imposes a 3-year officer and director bar against Hu but does not include any civil monetary penalty based on Hu's financial condition.

The SEC's Complaint, filed on July 30, 2012, charged Hu, former chief financial officer of China Yingxia, with fraudulent representations in Sarbanes-Oxley certifications. Among other things, the Complaint alleges that Hu made material misrepresentations in several SOX certifications. The SEC alleges that Hu misrepresented that he had designed or caused to be designed disclosure and internal controls, when he had not done so. The SEC also alleges that Hu knowingly failed to implement internal controls, aided and abetted China Yingxia's failure to do so, and made materially misleading statements to auditors concerning such controls and potential fraud by the CEO, who has reportedly been convicted by Chinese authorities for illegal fundraising activities, similar to a Ponzi scheme. China Yingxia, a Chinese reverse merger company, failed in early 2009. Hu consented, without admitting or denying the allegations of the SEC's Complaint, to the entry of the final judgment.

The Commission also previously reached several other settlements stemming from its investigation into China Yingxia. The Commission's related civil injunctive actions are still pending.