Media companies linked to Guo Wengui pay $539m to settle SEC case
US regulator alleges that companies engaged in illegal offerings of stock and digital assets
Three media companies linked to Guo Wengui, a Chinese businessman and prominent critic of the Chinese Communist party living in exile in the US, will pay $539m to US securities regulators to resolve allegations that they issued illegal securities to more than 5,000 investors.
The US Securities and Exchange Commission announced on Monday the civil action against GTV Media Group, its parent Saraca Media Group and Voice of Guo Media for an alleged unlawful offering of GTV stock, the regulator said in a statement. GTV, which owns and operates a social media platform, and Saraca were also accused of illegally issuing a digital asset security called G-Coins or G-Dollars.
“Thousands of investors purchased GTV stock, G-Coins, and G-Dollars based on the respondents’ solicitation of the general public with limited disclosures,” Richard Best, director of the SEC’s New York regional office, said in a statement.
The companies have been linked to Guo in numerous US media reports. The SEC failed to register both offerings, from which they raised about $487m in total. They agreed to pay more than $539m to settle the claims without either admitting or denying the regulator’s findings.
A lawyer for GTV and Saraca said in a statement that the companies “are pleased to have reached this resolution, which achieves our goal of returning funds to our supporters, an objective we have had since these regulatory matters commenced”.
The GTV stock offering memorandum touted a recently launched social media platform focused on news that would be “the first ever platform which will combine the power of citizen journalism and social news with state of the art technology, big data, artificial intelligence, blockchain technology and real-time interactive communication”, according to the SEC’s order.
The new platform aimed to be “the only uncensored and independent bridge between China and the Western world” the memorandum said, according to the SEC.
GTV and Saraca also claimed the digital coins would likely offer “significant returns” based on the development of an online platform on which investors could use G-Coins or G-Dollars, the SEC said.
Guo fled from China to the US in 2014, where he allied with demoralised overseas dissidents and China hawks, including Steve Bannon, the former White House adviser to Donald Trump.
Bannon was listed as a director at GTV Media and was a central figure together with Guo behind the company’s launch, according to the Wall Street Journal.
Last year, the former adviser was reportedly arrested on Guo’s yacht on fraud charges not linked to the Chinese businessman. He was later pardoned by Trump.
Guo was at the centre of Chinese political drama in 2017 when he publicly criticised the Chinese Communist party via social media, casting doubt on the integrity of Beijing’s anti-corruption purge, which was spearheaded by China’s vice-president Wang Qishan on behalf of Xi Jinping.
Lawyers for Voice of Guo Media did not immediately respond to requests for comment.