The Security and Exchange Commission (SEC) has won the legal battle against China Voice Holding Corp., the agency revealed on Friday.
The defeat eventually came as a disaster for China Voice Corp. whose assets will now be seized. And to make matters even worse, one of the co-founders of the company was also accused of running a Ponzi scheme worth $8.6 million.
SEC earlier claimed in its lawsuit saying that a number of top level executives from the telecom company, including the former CEO William Burbank, Chief Financial Officer David Ronald Allen amongst others, had kept the government as well as the public in dark about its actual financial conditions and overstated its business activities in China.
Whereas, the Ponzi scheme, as claimed by SEC, involved false assurances given to investors to keep their hopes and interest alive, and use their investment for enriching the company as well as themselves, perpetrators of the scheme.
The complaint filed in the U.S. district court in Dallas stated (opens in new tab), "Since at least 2006, China Voice, Allen, Burbank and others have made false and misleading public statements about China Voice, to maintain the facade of a prosperous company, while masking the unjust enrichment of the principals".
When approached for comments on this latest development, a representative of China Voice Corp. declined to comment.