A Hong Kong businessman has been indicted for allegedly filing false and deceptive investment adviser forms with the United States Securities and Exchange Commission (SEC). The Hong Kong native was indicted by a federal grand jury in the District of Columbia for his role in the conspiracy.
According to United States authorities, the Hong Kong native, Guanhua Su, filed false SEC investment adviser forms for at least 10 shell businesses that he and other co-conspirators created. Authorities claimed that the false form gave the impression that the firms were legitimate financial advisers, even though they were fake entities. Law enforcement claimed that at least two of the fake entities were then used to convince retail investors through WhatsApp and other social media to invest in stocks of Chinese firms listed on NASDAQ.
Hong Kong businessman indicted by federal grand jury
According to the indictment, Su, a 37-year-old Hong Kong native who goes by the alias Michael Su, was the managing director and marketing director of Rhino Consulting Business Services Ltd. The firm is based in Hong Kong and offers financial services. Authorities claimed that Su and other co-conspirators carried out the alleged offenses between February 2023 and March 2025.
Su and other indicted parties created at least 10 shell firms and filed the fraudulent SEC forms on behalf of all the companies. Authorities claimed that he made false statements concerning all the firms, noting examples in relation to filings made for Bluesky Eagle Capital Management and Wisdom Capital Management Group. They claimed that Su allegedly made false statements concerning both firms’ place of business, status as a public company, among others.
In the indictment, authorities claimed that Bluesky Eagle and Wisdom Capital were used by the co-conspirators to convince investors to purchase stock of a NASDAQ-listed public company based in the Cayman Islands with business in China. They claimed that at one point, the company operated with a variable interest entity (VIE) structure. The co-conspirators also allegedly promised returns of up to 500% to their WhatsApp investors, promising to compensate them for all losses.
Indictment opens a can of worms
The indictment further alleges that the co-conspirator told investors to purchase stock of the public company promoted by WhatsApp accounts associated with the sham firms. They sold the company’s stock through foreign brokerage accounts, gaining proceeds of up to $211 million. However, in April 2024, the public company’s stock collapsed by 88% resulting in huge losses for investors.
On November 13, the SEC filed civil actions against a number of entities for which the DOJ had charged Su with filing false forms with the regulator. In its filing, the SEC noted that it initiated proceedings against Bluesky Eagle and Supreme Power Capital Management in the Southern District of New York. In addition, it also filed actions against AI Financial Education Foundation, Adamant Stone, AI Investment Education Foundation, and Invesco Alpha in the District of Colorado.
The SEC had previously filed a civil action against Wisdom Capital in the District of Columbia. Meanwhile, Su has been charged with conspiracy to commit Securities fraud, making material misstatements in a report filed with the SEC, and false statements. If convicted, the Hong Kong native faces a maximum penalty of five years for each count. “Today’s indictment charges the defendant for his alleged role in a complex securities fraud scheme that caused hundreds of millions of dollars in investor losses,” said Acting Assistant Attorney General Matthew Galeotti of the Justice Department’s Criminal Division.
He added that the division is fully against foreign actors who intend to victimize American retail investors. Galeotti noted that under his leadership, the Criminal Division is committed to actively investigating and prosecuting criminals who steal from US citizens through fraud and deceit. “The SEC-OIG will tirelessly investigate domestic and foreign actors who seek to abuse the SEC’s processes for malicious purposes,” said SEC Inspector General (SEC-OIG) Kevin B. Muhlendorf.
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