This month, the Securities and Exchange Commission announced that an overseas stock manipulator had agreed to the punishment handed down for manipulating the stock of a small oil & gas company. The SEC investigation revealed that Joe Yiu Cheung had been controlling the United American Petroleum Corporation. He was accused of utilizing a sophisticated network of overseas banks and brokerage accounts to conceal his ownership of the company.
Cheung used a fraudulent promotional campaign to artificially boost the company’s stock price, before proceeding to dump his shares. Since Cheung did not file the required paperwork, his ownership of UAPC stock went unnoticed. Along the way, Cheung allegedly paid for promotional materials to be sent to 2.2 million Americans. That information provided investors with a rosier outlook for UAPC’s operations and future prospects.
The SEC’s order discovered that Cheung ordered his foreign brokers to sell his shares when the UAPC stock price was climbing higher. Cheung did not file the necessary reports, which would have revealed his sizeable sales to investors. Cheung lives in Canada and Hong Kong. He also goes by the name Dylon de lu Zhang. He is accused of violating Sections 17(a)(1) and (3) of the Securities Act of 1933, as well as Sections 10(b), 13(d) and 16(a) of the Securities Exchange Act of 1934. He also violated Rules 10b-5(1) and (c).
Cheung has agreed to the punishment handed down by the SEC, without denying or admitting to the findings. He has agreed to cease and desist from further violations and will face a permanent ban from penny stocks. He has also agreed to pay $542,498.33 in disgorgement, $94,131.66 in interest, and a $150,000 penalty. Cheung will be placed under a 10-year officer-and-director bar as well.