WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission on Thursday charged the CEO of Future FinTech Group with fraud and disclosure failures for allegedly manipulatively trading in the financial services firm's stock prior to becoming its chief.
The regulator said in a statement that Future FinTech's Shanchun Huang used an offshore account to trade shares shortly before he becoming CEO in 2020. The SEC also said it charged Huang with failing to disclose his beneficial ownership of Future FinTech stock as well as transactions in such stock.
"Mr. Huang has compelling defenses to the SEC’s allegations, such that he is confident in the ultimate outcome of the misinformed civil complaint," Jacob Frenkel, a lawyer representing the executive, said in an emailed statement.
According to the SEC, Huang began to trade shares of FinTech Group's stock beginning in January 2020 after being approached to become the firm's CEO. His trades, which made up a high percentage of daily trading volume, including placing multiple buy orders and other activity intended to boost prices, the SEC said.
The trades came at a time when Future FinTech was at risk of being kicked off the Nasdaq because its share price had fallen below the exchange's minimum bid price requirement of $1 a share, regulators said.
Future FinTech's shares were down about 17% in after-hours trading on Thursday.