Updated January 12th, 2024 at 10:46 IST
SEC charges Future Fintech’s Shanchun Huang with fraud and disclosure failure
The regulatory body asserted that Huang utilised an offshore account to engage in stock trading shortly before his appointment as CEO in 2020.
Future Fintech CEO sued: The US Securities and Exchange Commission (SEC) announced on Thursday that it has levelled charges against Shanchun Huang, the CEO of Future FinTech Group (FTFT.O), for alleged fraudulent activities and lapses in disclosure concerning trading in the company's stock prior to assuming his leadership role.
The regulatory body asserted that Huang utilised an offshore account to engage in stock trading shortly before his appointment as CEO in 2020. Furthermore, the SEC contended that Huang failed to disclose his beneficial ownership of Future FinTech shares, as well as transactions related to such shares.
Jacob Frenkel, the legal representative for Huang, responded to the allegations, stating via email, "Huang has robust defences against the SEC's claims, expressing confidence in the eventual resolution of what he perceives as a misguided civil complaint."
Artificially inflating stocks
According to the SEC's findings, Huang commenced trading Future FinTech Group's stock in January 2020, subsequent to being approached for the CEO position. The commission indicated that Huang's trading activities, which represented a significant proportion of the daily trading volume, involved multiple buy orders and other actions aimed at artificially inflating the stock prices.
The SEC's scrutiny comes at a juncture when Future FinTech faced potential delisting from the Nasdaq exchange due to its share price plummeting below the minimum bid price threshold of $1 per share.
In response to these developments, Future FinTech's shares experienced a decline of approximately 17 per cent in after-hours trading on Thursday.
(With Reuters inputs)
Published January 12th, 2024 at 10:46 IST