On January 9th, the day before a scheduled trial to determine monetary relief, the SEC and Steve Chen attended a settlement conference.

A settlement was reached, pending formal approval by the Commission (SEC attorneys can’t accept a settlement agreement of their own accord).

Unfortunately Commission approval of the settlement is anticipated to take “approximately six weeks”.

A consent filing by the SEC on January 9th stipulates that whilst neither ‘admitting or denying any allegations‘ in the SEC’s complaint, Steve Chen will nonetheless consent to a judgement of $145.4 million.

Chen neither admitting or denying he was running a Ponzi schemes seems like a moot point. Last month summary judgement was ruled in favor of the SEC, based on the fact Chen ran USFIA as a Ponzi scheme.

Looking forward, the January 10th trial has been continued till March 14th, by which time the SEC will have approved or rejected the proposed settlement.

Personally I see them accepting it, as this is much cleaner way of recouping the millions Chen stole from victims.

It’s either this or go to trial for roughly the same amount, which makes little sense.

For Chen it’s a lose-lose situation. He either loses now and voluntarily returns victim’s money via settlement, or loses later at trial and is forced to return what he stole.

Pending approval of the proposed settlement, it will be interesting to see if the DOJ follow up with criminal charges. I have a feeling that investigation is ongoing.