This month, the U.S. District Court for the Northern District of Texas put forth an order freezing the assets of Weizhen Tang, his hedge fund Oversea Chinese Fund LP, a number of related entities, and an investment adviser. The move comes after the Securities and Exchange Commission accused Tang and the fund of running a multi-million dollar Ponzi scam. Tang calls himself the “Chinese Warren Buffet.” The federal judge in Dallas has appointed a receiver to take charge of Tang’s assets.
According to the SEC, Tang raised somewhere between $50 million to $75 million, procuring the funds from over 200 investors. Chinese-American investors were reportedly his primary targets.
The commission says that Tang has been running his hedge fund as a Ponzi scheme for at least a few years and that he allegedly told investors that he posted false profits on their account statements to cover up the significant trading losses and bring in new investors while using money from new investors to return principle and pay at least $8 million in bogus profits to other investors.
The SEC is charging Tang, Oversea Chinese Fund LP, WinWin Capital Management LLC, J.O.R. & Associates LLC, Weizhen Tang Corp. WinWin Capital LP, and Weizhen Tang & Associates Inc. Named as relief defendants are Tang entities Bluejay Investment LLC, and WinWin Capital Partners LP. The Commission is seeking a final judgment, permanent enjoinment from future violations, emergency and interim relief, payment of financial penalties, disgorgement of ill gotten-gains, and prejudgment interest.
The commission says that Tang offered and sold limited partnership interests in WinWin Capital Partners to raise capital for the hedge fund. The SEC says that as of March 10, WinWin Capital Partners had raised nearly $17.3 million in principal investments from about 75 US investors.
On his Web site, however, Tang recently posted a blog saying that he was not running a Ponzi scam. The 50-year-old Toronto hedge fund manager has also been accused by the Ontario Securities Commission of investment fraud and cheating investors in China and Canada.
Related Web Resources:
SEC Halts On-Going Multi-Million Dollar Ponzi Scheme and Affinity Fraud Involving Investments in a Canadian-Based Hedge Fund, SEC, April 6, 2009 SEC sues Toronto’s ‘Chinese Warren Buffett’, Financial Post, April 14, 2009
Weizhen Tang: The Chinese Warren Buffet Accused Of Ponzi Scheme, The Huffington Post, April 14, 2009
Read the SEC Complaint (PDF)
Contact our Texas securities fraud lawyers to request your free case evaluation. We have helped many investors recover their funds.