Bin Hao and Qidian LLC
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25867 / September 29, 2023
Securities and Exchange Commission v. Bin Hao and Qidian LLC, No. 1:23-cv-23704 (S.D. Fla. filed September 28, 2023)
SEC Charges Virginia Resident with Operating a Ponzi Scheme that Targeted Chinese-American Community
The Securities and Exchange Commission has charged Virginia resident Bin Hao and his company Qidian LLC, alleging that they fraudulently raised approximately $10.3 million from at least 60 investors in at least 17 states through an unregistered securities offering to members of the Chinese-American community, predominately in Virginia and Maryland.
The SEC’s complaint alleges that, from at least 2017 to 2020, Hao, through Qidian, offered and sold promissory notes and membership interests to investors with high annual return rates of 8-25% to facilitate providing loans to a Miami-based real estate company. As alleged, starting in January 2019, the Miami real estate company ceased making nearly all interest payments to Qidian. Nevertheless, Qidian and Hao continued to solicit investors and raised approximately $10.3 million by promising the same high annual rates of return and to use the funds for real estate loans, while failing to disclose the Miami real estate company’s financial condition. In addition, as alleged in the complaint, Qidian and Hao used millions of dollars of new investor money to pay prior investors in Ponzi-like fashion, and Hao misappropriated at least $793,267 to pay personal expenses.
The SEC’s complaint, filed in U.S. District Court for the Southern District of Florida, charges Hao and Qidian LLC with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctive relief, disgorgement of allegedly ill-gotten gains plus prejudgment interest, civil penalties against each of the defendants and an officer-and-director bar against Hao.
The SEC’s investigation was part of the Miami Regional Office’s Fraud Against Minority Groups Initiative and was conducted by Paul Hopker in the Miami Regional Office and supervised by Jason R. Berkowitz and Glenn S. Gordon. The SEC’s litigation will be led by Alice Sum and supervised by Teresa J. Verges.
Last Reviewed or Updated: Sept. 29, 2023