TeamVinh consent to judgement in SEC Ponzi case
Last December the SEC filed a complaint against TeamVinh, alleging it was a $3 million dollar Ponzi scheme.
Also named in the complaint as a defendant was owner Vu H. Le (aka Vinh H. Le), who along with TeamVinh initially failed to respond to the SEC’s lawsuit.
That saw the SEC file a motion for default judgement on January 8th. Default judgement was granted on January 11th, however it was later vacated following the appearance of a lawyer for Vinh and Le on February 1st.
TeamVinh and Le claimed that
After the (SEC’s) complaint was served, (TeamVinh and Le) engaged in settlement discussions with the (SEC). However, the parties were unable to reach an agreement whereby (TeamVinh and Le) would enter into a Consent to the entry of a judgment.
During this period, (TeamVinh and Le) worked to review its substantial books and records, particularly as they relate to allegations made in the complaint. None of (TeamVinh and Le’s) activity in failing to file an answer or otherwise pleading was done intentionally to cause delay.
TeamVinh and Le also advised the court that ‘consent to the entry of a judgment‘ had been agreed on, paving the way for a settlement.
On March 11th a judgement against TeamVinh and Le, based on the consent agreement, was filed.
As per the order, TeamVinh and Le are
permanently restrained and enjoined from violating, directly or indirectly, or from aiding and abetting violations of the Securities
Specifically, TeamVinh and Le are prohibited from
- employing any device, scheme, or artifice to defraud
- obtaining money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or
- engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser
In a nutshell, no more Ponzi scamming for TeamVinh or Le.
Of note is the agreed consent sees TeamVinh and Le neither admit or deny the allegations in the SEC’s complaint.
They are however prohibited from ‘arguing that they did not violate the federal securities laws as alleged in the complaint‘.
So basically, “winkwinknudgenudge, we don’t admit we ran a Ponzi scheme but we can’t say we didn’t run one either”.
On the remittance side of things, TeamVinh and Le
shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty.
Prejudgment interest shall be calculated from July 22, 2010, based on the rate of interest used by the Internal Revenue Service for the underpayment of federal income tax.
The Court shall determine the amounts of the disgorgement and civil penalty upon motion of the Commission.
As at the time of publication, the SEC have yet to file a motion specifying how much TeamVinh and Le will be required to pay back.
Update 31st January 2017 – Today the SEC has announced TeamVinh will pay $2.3 million in disgorgement.
TeamVinh and owner/operator Vu Le will also pay a $320,000 combined civil penalty fine.