SEC v. Xiaosong Wang, No. LR-26245, District of Massachusetts (Feb. 11, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26245 / February 11, 2025 Securities and Exchange Commission v. Shuang Chen, et al., No. 1:19-cv-12127 (D. Mass. filed Oct. 15, 2019) SEC Obtains Final Judgment Against Trader in Stock Manipulation Scheme On January 29, 2025, the U.S. District Court for the District of Massachusetts entered a final consent judgment against defendant Xiaosong Wang for his role in a stock manipulation scheme that generated millions in illegally obtained proceeds on the trading of stock in more than 3,900 publicly traded securities. The entry of the final consent judgment resolves all claims arising out of the SEC’s amended complaint, filed on December 23, 2019 to add two defendants and eight additional relief defendants to the complaint originally filed October 15, 2019, which charged eighteen traders. The amended complaint alleged that the traders manipulated the prices of thousands of thinly traded securities by creating the false appearance of trading interest and activity in those stocks, thereby enabling them to reap illicit profits by artificially boosting or depressing stock prices. The Court’s judgment against Xiaosong Wang permanently enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and finds him liable for disgorgement of ill-gotten gains of $1,041,084 plus $80,428.35 in prejudgment interest thereon, to be deemed satisfied by an order of forfeiture in a parallel criminal case against him and monies previously collected in the civil case. In the parallel criminal action brought by the U.S. Attorney’s Office for the District of Massachusetts, on September 12, 2024, Xiaosong Wang pleaded guilty to conspiracy to commit securities fraud in violation of 18 U.S.C. § 1349 and was later sentenced to 30 days in custody and ordered to pay forfeiture of $1,041,084. He was also ordered to leave the United States and return to China. On February 20, 2024, the Court entered a final consent judgment against the sole remaining relief defendant at that time, Wannian Investment, Inc., finding Wannian liable for disgorgement of $4,121,754.65, representing the net profits gained as a result of the scheme that had been transferred to Wannian. The Court earlier entered a final consent judgment against defendant Jiali Wang on March 27, 2023, permanently enjoining him from violating the antifraud provisions of the securities laws described above, and finding him liable for disgorgement of ill-gotten gains of $7,750,000 to be deemed satisfied by an order of forfeiture in a parallel criminal action brought by the U.S. Attorney’s Office for the District of Massachusetts. Previously, on June 9, 2022, the Court granted the SEC’s motion for default judgment against sixteen defendants: Shuang Chen, Wenwen Du, Lirong Gao, Jing Guan, Tonghui Jia, Xuejie Jia, Honglei Shi, Lujun Sun, Huailong Wang, Jiadong Wang, Jiafeng Wang, Linlin Wu, Lin Xing, Yong Yang, Jiancheng Zhao, and Forrest (HK) Co., Limited, permanently enjoining each from violating the same antifraud provisions of the securities laws described above. The Court also determined that all of these defendants were jointly and severally liable for disgorgement of ill-gotten gains of $35,603,447 plus $5,989,769 in prejudgment interest thereon, and ordered each to pay a civil penalty of $2,000,000. Also on June 9, 2022, the Court granted the SEC’s motion for default judgment against relief defendants Weiguo Guan, Jingquan Liu, Rishan Liu, Weigang Yang, Jingru Zhai, Song Geng, Qinghua Ren, Jixiang Teng, Xiangjia Yang, and Xiuchun Zhang, ordering disgorgement individually in amounts ranging from $3,505 to $533,713, plus prejudgment interest, for a total of $1,512,333. The SEC’s litigation was led by Andrew Palid and supervised by Michele T. Perillo and Joseph G. Sansone of the Market Abuse Unit along with Martin Healey of the Boston Regional Office.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26245 / February 11, 2025 Securities and Exchange Commission v. Shuang Chen, et al., No. 1:19-cv-12127 (D. Mass. filed Oct. 15, 2019) SEC Obtains Final Judgment Against Trader in Stock Manipulation Scheme On January 29, 2025, the U.S. District Court for the District of Massachusetts entered a final consent judgment against defendant Xiaosong Wang for his role in a stock manipulation scheme that generated millions in illegally obtained proceeds on the trading of stock in more than 3,900 publicly traded securities. The entry of the final consent judgment resolves all claims arising out of the SEC’s amended complaint, filed on December 23, 2019 to add two defendants and eight additional relief defendants to the complaint originally filed October 15, 2019, which charged eighteen traders. The amended complaint alleged that the traders manipulated the prices of thousands of thinly traded securities by creating the false appearance of trading interest and activity in those stocks, thereby enabling them to reap illicit profits by artificially boosting or depressing stock prices. The Court’s judgment against Xiaosong Wang permanently enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and finds him liable for disgorgement of ill-gotten gains of $1,041,084 plus $80,428.35 in prejudgment interest thereon, to be deemed satisfied by an order of forfeiture in a parallel criminal case against him and monies previously collected in the civil case. In the parallel criminal action brought by the U.S. Attorney’s Office for the District of Massachusetts, on September 12, 2024, Xiaosong Wang pleaded guilty to conspiracy to commit securities fraud in violation of 18 U.S.C. § 1349 and was later sentenced to 30 days in custody and ordered to pay forfeiture of $1,041,084. He was also ordered to leave the United States and return to China. On February 20, 2024, the Court entered a final consent judgment against the sole remaining relief defendant at that time, Wannian Investment, Inc., finding Wannian liable for disgorgement of $4,121,754.65, representing the net profits gained as a result of the scheme that had been transferred to Wannian. The Court earlier entered a final consent judgment against defendant Jiali Wang on March 27, 2023, permanently enjoining him from violating the antifraud provisions of the securities laws described above, and finding him liable for disgorgement of ill-gotten gains of $7,750,000 to be deemed satisfied by an order of forfeiture in a parallel criminal action brought by the U.S. Attorney’s Office for the District of Massachusetts. Previously, on June 9, 2022, the Court granted the SEC’s motion for default judgment against sixteen defendants: Shuang Chen, Wenwen Du, Lirong Gao, Jing Guan, Tonghui Jia, Xuejie Jia, Honglei Shi, Lujun Sun, Huailong Wang, Jiadong Wang, Jiafeng Wang, Linlin Wu, Lin Xing, Yong Yang, Jiancheng Zhao, and Forrest (HK) Co., Limited, permanently enjoining each from violating the same antifraud provisions of the securities laws described above. The Court also determined that all of these defendants were jointly and severally liable for disgorgement of ill-gotten gains of $35,603,447 plus $5,989,769 in prejudgment interest thereon, and ordered each to pay a civil penalty of $2,000,000. Also on June 9, 2022, the Court granted the SEC’s motion for default judgment against relief defendants Weiguo Guan, Jingquan Liu, Rishan Liu, Weigang Yang, Jingru Zhai, Song Geng, Qinghua Ren, Jixiang Teng, Xiangjia Yang, and Xiuchun Zhang, ordering disgorgement individually in amounts ranging from $3,505 to $533,713, plus prejudgment interest, for a total of $1,512,333. The SEC’s litigation was led by Andrew Palid and supervised by Michele T. Perillo and Joseph G. Sansone of the Market Abuse Unit along with Martin Healey of the Boston Regional Office.