Ex-ChinaCast executives charged with fraud, insider trading in US
Millions of dollars missing as US regulators charge former top executives from China's ChinaCast Education Corp.
US securities regulators on Thursday charged the former chief executive of China-based ChinaCast Education Corporation with stealing tens of millions of dollars from investors in a US public offering.
Ex-CEO Chan Tze Ngon transferred US$41 million to a subsidiary that then transferred funds outside of the company, the US Securities and Exchange Commission (SEC) said.
The SEC also charged the company’s former president of China operations, Jiang Xiangyuan, with insider trading. Xiangyuan allegedly avoided more than US$200,000 in losses by unlawfully selling some 50,000 shares after transferring some of the company’s assets.
The company, which once had a market capitalisation of more than US$200 million, entered the US capital markets through a so-called reverse-merger in 2006. Nasdaq delisted ChinaCast after it failed to file an annual report for 2011.
Lawyers for the two defendants could not be immediately reached for comment.
“Chan orchestrated the systematic looting of ChinaCast and hid his misconduct by repeatedly lying to investors about the company’s assets,” said Sanjay Wadhwa, senior associate director for enforcement in the SEC’s New York office.