MAN ORDERED TO PAY OVER $3 MILLION FOR ALLEGED ROLE IN STOCK MANIPULATION SCHEME

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23234 / April 8, 2015

Securities and Exchange Commission v. 8000, Inc., Jonathan E. Bryant, Thomas J. Kelly, and Carl N. Duncan, Esq., Civil Action No. 12-civ-7261

Court Orders U.K. Man to Pay More Than $3 Million in U.S. Stock Manipulation Scheme

The Securities and Exchange Commission announced today that on April 7, 2015, the U.S. District Court for the Southern District of New York entered a final judgment against Jonathan E. Bryant of Crewe, Cheshire, United Kingdom which ordered Bryant to pay a total of $3,168,184.70 in a stock manipulation case filed by the Commission in 2012. Bryant is the Chief Executive Officer of 8000, Inc., a now defunct Virginia-based company. The Commission alleges that, in 2009 and 2010, Bryant directed a scheme to inflate 8000, Inc.'s stock price while secretly controlling a majority of the company's shares and directing its operations.

In addition to Bryant, the Commission's complaint, filed on September 27, 2012, also charged 8000, Inc., the company's former Chief Executive Officer, Thomas Kelly of Levittown, Pennsylvania, and the company's attorney, Carl N. Duncan of Bethesda, Maryland. The complaint alleged that the defendants participated in a scheme to manipulate the trading volume and price of 8000 Inc.'s common stock by disseminating false information about the company and simultaneously selling or facilitating the sale of its securities which were not supposed to be for sale to the general public. According to the complaint, from November 2009 through October 2010, Bryant and Kelly disseminated financial reports and press releases falsely representing that 8000, Inc. had millions of dollars in capital financing and revenues when, in fact, the company had neither. As 8000, Inc.'s stock price rose based on the false information they were disseminating, Bryant profited by selling 56.8 million "restricted" shares of 8000, Inc. into the market. Because the shares were restricted, they should not have been sold into the market at that time. The complaint alleged that Duncan provided false legal opinions removing the trading restrictions on the stock, and that Kelly profited from the scheme by buying and selling the company's securities in the secondary market. The complaint alleged that the defendants' scheme increased the volume of trading in 8000, Inc. by 93% and the company's stock price from less than $0.01 per share to $0.42 per share between November 2009 and October 2010.

Bryant consented to the entry of this final judgment. The final judgment permanently enjoins Bryant from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The final judgment also orders Bryant to disgorge the $2,969,525 in profits that he realized from selling 8000, Inc.'s restricted securities and to pay $198,659.70 in pre-judgment interest. Additionally, the final judgment bars Bryant from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, and permanently bars him from participating in an offering of a penny stock.

The final judgment against Bryant follows a judgment by consent that the court entered against Kelly on June 6, 2013, which permanently enjoins Kelly from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. It also permanently bars Kelly from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, and permanently bars him from participating in an offering of a penny stock. On September 2, 2014, after a hearing, the court ordered Kelly to pay $415,569 in profits that he realized from trading in 8000 Inc.'s securities in the secondary market and to pay $46,697 in pre-judgment interest.

Duncan agreed to settle the Commission's action at the time it was filed. In December 2012, the court entered a final judgment against Duncan that permanently enjoins Duncan from violating Sections 5(a), 5(c), and 17(a)(2) of the Securities Act, permanently enjoins him from participating in the preparation and issuance of certain opinion letters, bars him from participating in an offering of a penny stock, and ordered him to disgorge $15,570 in unlawful proceeds and to pay $524.98 in prejudgment interest and a $25,000 civil money penalty. Duncan also consented to an administrative order issued pursuant to Rule 102(e)(3) of the Commission's Rules of Practice permanently suspending him from appearing or practicing before the Commission as an attorney.

The Commission's motion for a default judgment against 8000, Inc. is pending.

FRAUD CHARGES FILED BY SEC IN STOCK MANIPULATION SCHEME

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

SEC Files Fraud Charges Against Lee Chi Ling and Perfect Genius Limited for Their Roles in a Wide-Ranging Stock Manipulation Scheme

The Securities and Exchange Commission filed an action related to an elaborate stock manipulation scheme involving shares of China Energy Savings Technology, Inc. against Lee Chi Ling, as a defendant, and Perfect Genius Limited, as a relief defendant. The fraudulent scheme was orchestrated by Chiu Wing Chui, Lai Fun Sim, Jun Tang Zhao (together, the Chiu Group), Lee, and others acting in concert. As discussed below, Chiu, Sim, Zhao, and others were previously charged and found liable for fraud for their roles in the scheme.

The Commission's complaint, filed on September 26, 2013 in the Eastern District of New York, alleges that Lee played a crucial role in the illegal scheme. According to the Complaint, Lee or entities that she controlled, including Perfect Genius, furthered the fraud by: (i) receiving shares of China Energy directed to her by the Chiu Group; (ii) selling some of those shares to profit from artificially high prices created by transactions directed by the Chiu Group and their dissemination of false and misleading information about China Energy to investors and the public; and (iii) acting as nominees, along with a number of other entities, which concealed the illegal trading in the shares of China Energy and masked the Chiu Group's control of China Energy.

In its complaint, the Commission alleges that Lee violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder, and Sections 17(a)(1) and (3) of the Securities Act of 1933; and seeks disgorgement and prejudgment interest. The Commission also names Perfect Genius as a relief defendant, seeking the return of ill-gotten gains from the sales of China Energy securities in an account that Lee opened in the name of that entity for the purpose of furthering the scheme and holding the resulting illicit proceeds.

SEC v. Lee is the latest in a series of enforcement actions brought by the Commission concerning the China Energy fraud:

On December 4, 2006, the Commission filed a fraud complaint against China Energy, Chiu Wing Chiu, who was the undisclosed control person of China Energy, and several of Chiu's associates. SEC v. China Energy 06-CV-6402 (EDNY). (Press Release 2006-200; Lit. Rel. 19933; Complaint) The Commission also obtained an emergency order freezing $3.9 million in assets held in four U.S. brokerage accounts by nominees of Chiu Wing Chiu.

On December 6, 2006, the Commission issued an order revoking China Energy's stock registration statements (Admin. Proc. 34-54881). The Commission had previously issued orders suspending trading in China Energy securities on May 19, 2006 (Lit. Rel. 34-53839) and September 26, 2006 (Lit. Rel. 34-54503A).
On March 27, 2009, the Commission obtained final judgments in SEC v. China Energy against Chiu, Lai Fun "Stella" Sim, Jun Tang Zhao, Sun Li, and New Solomon Consultants, finding them liable for fraud, and ordering them to pay over $34 million in disgorgement, prejudgment interest, and civil penalties. The court also imposed officer-and-director bars against Chiu, Sim, Zhao, and Li.
On July 31, 2009, the Commission obtained final judgments SEC v. China Energy against the relief defendant nominees of Chiu, ordering that the $3.9 million held in the relief defendants' U.S. brokerage accounts be turned over to the Court as proceeds of the fraud.

The Commission also obtained a final judgment against Jason Genet, finding him liable for fraud; permanently enjoining him from future violations of Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; ordering Genet to pay $2,527,745 in disgorgement, prejudgment interest and penalties; and barring him from participation in any offering of a penny stock for five years from the date of the judgment. (Lit. Rel. 34-21232)

On December 20, 2010, the Commission also issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order against Moore Stephens Wurth Frazer & Torbet LLP (MSWFT) and Kerry Dean Yamagata (Admin. Proc. 3-14167/33-9166).