SEC Reaches Settlement With Companies Linked To Chinese Billionaire Over Illegal Stock Offerings

The Securities and Exchange Committee (SEC) announced on Monday that it reached a settlement with several media companies linked to an exiled Chinese billionaire.

In a press release, the SEC said that it reached a $539 million settlement with New York City-based GTV Media Group Inc. and Saraca Media Group Inc., and Phoenix-based Voice of Guo Media Inc. on charges of issuing illegal GTV stock and offerings of a digital currency called G-Coins. The three companies are linked to businessman Guo Wengui, a controversial billionaire from China who is close to Steve Bannon, former President Donald Trump’s White House strategist.

The SEC statement explained that in a period from April to June 2020, the companies solicited thousands of individuals to invest in the GTV stock offerings and digital assets. The pitches were made through YouTube, Twitter, and in videos posted to the GTV and Saraca websites and resulted in about $487 million from 5,000 investors. No registration statements were filed with U.S. regulators for either offering and neither would have qualified for an exemption to these rules.

Of the $539 million paid to U.S. regulators, GTV and Saraca agreed to pay $434 million as a remedy to their profits, prejudgment interest of approximately $16 million, and a civil penalty of $15 million for each party. Voice of Guo agreed to pay disgorgement of more than $52 million, prejudgment interest of nearly $2 million, and a $5 million civil penalty.

All of the parties agreed to a cease and desist order without accepting or denying wrongdoing on their part.

Neither Guo nor Bannon were named in the SEC announcement.

"Thousands of investors purchased GTV stock, G-Coins, and G-Dollars based on the respondents' solicitation of the general public with limited disclosures," said Richard R. Best, Director of the SEC's New York Regional Office. "The remedies ordered by the Commission today, which include a fair fund distribution, will provide meaningful relief to investors in these illegal offerings."

Guo, estimated to hold a net worth of $1.1 billion, built his wealth in real estate. He fled China in 2014 after anticipating authorities there would file corruption charges against him. Guo's latest moves have also come under scrutiny.

Last week, it was reported that Guo was using one of his company platforms to promote misinformation about the use of ivermectin and the malaria drug artemisinin to treat COVID-19. Neither the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), or the World Health Organization (WHO) have approved these drugs for treating COVID-19.