David R. Chase, P.A.
Call Us Now: 800-760-0912
David R. Chase, P.A.
Call Us Now: 800-760-0912


SEC Charges CEO With Stock Manipulation Scheme Designed to Avoid NASDAQ Delisting

Stock Manipulation Lawyer

The U.S. Securities and Exchange Commission filed an enforcement action against Shanchun Huang for allegedly engaging in a scheme to manipulate Future FinTech Group stock by utilizing an offshore account shortly prior to being tapped as the company’s Chief Executive Officer in 2020.  In addition to the securities manipulation charge, the SEC also sued Huang for his failure to disclose his beneficial ownership and trading in the company’s stock.

Per the SEC’s court allegations, in or about the end of 2019, Future FinTech’s founder and former CEO solicited Huang concerning the possibility of taking over the role of CEO at Future FinTech.  Huang, according to the SEC, then utilized a securities account in Hong Kong to enter trades in the company’s stock starting in around January 2020, when Future FinTech was at risk of NASDAQ delisting given that its stock price had sunk below the NASDAQ’s minimum bid price of $1.00 per share.  In an effort to manipulate the stock, Huang, as the SEC contends, purchased in excess of 530,000 shares of company stock during a two-month time period, and consistently engaged in trading at a volume such that it comprised a large percentage of the stock’s daily volume.  In furtherance of this purported stock manipulation by Huang, he also: (1) entered multiple purchased orders in a short time-period, (2) entered limit buy orders with increasing limit prices from one order after another, and (3) engaged in trading that was inconsistent with a rational investor who presumably would seek to buy the stock at the lowest price available.

The SEC’s lawsuit additionally contends that Huang’s trading was designed to, and on occasion did, move Future FinTech’s stock price higher.  By way of example cited by the SEC in its charging document, on February 6, 2020, Huang’s transactional activity amounted to approximately 60 percent of the stock’s daily volume, during which time he placed numerous purchase orders within less than ten minutes, causing the stock price to jump from $0.89 to $1.05, at which time his trading ceased.  Presumably, under the SEC’s theory, Huang ceased trading at that point as he had successfully moved the company’s stock price above NASDAQ’s $1.00 per share minimum bid.

When Huang assumed the role of Future Fintech CEO in March of 2020, he was obligated to file initial, annual and change of ownership forms with respect to his company stock positions, yet he did not do so for a year after having taken the CEO role, the SEC contends.  In March 2021, after Huang sold all of his company stock, he after-the-fact filed what the SEC characterized as a “misleading initial form” contending that he did not own any company securities.

The SEC charged Huang with, among others, violations of the anti-manipulation and anti-fraud provisions of the federal securities laws, and is seeking a civil monetary penalty, an officer-and-director bar, as well as injunctive relief against him.

Contact Stock Manipulation Lawyer David Chase

David Chase, Esq. is a SEC investigation defense attorney representing those under SEC investigation for stock manipulation, crypto fraud, insider trading, and securities offering schemes around the country, including New York City, Miami, Chicago, Boston Los Angeles, Atlanta and Las Vegas.  Formerly a SEC Enforcement Attorney, David is now a SEC investigation attorney and has over thirty years of experience and seasoned judgment protecting his clients who have received a SEC Subpoena and are under SEC investigation.  You may contact David toll-free at: 800-760-0912 or e-mail for a confidential consultation at: david@davidchaselaw.com, and can visit the Firm’s website for more information and content at: securitiesfrauddefense.com.

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