The Securities and Exchange Commission (SEC) has charged Future Fintech CEO Shanchun Huang with fraud for not disclosing his ownership and transactions involving Future Fintech stock shortly before he took on the CEO role.
According to allegations, between 2019 and 2020, Huang utilized an offshore account to buy and trade large volumes of Future Fintech stock over a two-month period, placing multiple orders in quick succession to artificially inflate prices. On February 6, 2020, the SEC reported that Huang accounted for 60% of the trading volume, executing numerous buy orders within just nine minutes, which caused the stock price to rise from $0.89 to $1.05.
After assuming the role of CEO, Huang did not file the required change of ownership forms for his company stock holdings until March 2021, at which point he claimed he no longer held any shares.
Sheldon L. Pollock, associate regional director of the SEC’s New York regional office, remarked, “Timely disclosure of insider stock transactions is a fundamental component of the federal securities laws that ensures the fair operation of our securities markets. CEOs should assume that the use of an offshore account will not prevent the staff of the SEC from identifying manipulative trading.”