The U.S. Department of Justice Charges Chinese Tech Executives in Securities Fraud Case
The U.S. Department of Justice (DOJ) has brought charges against two Chinese tech firm executives in connection with a securities fraud case. Lai Kui Sen and Yan Zhao are accused of orchestrating a scheme to defraud American investors using the stock of Ostin Technology Group (OST).
Allegations Against the Executives
Sent, the co-chief executive of the firm, and Zhao, a financial advisor, are alleged to have masterminded a pump and dump scheme involving OST. The scheme reportedly resulted in them making over $100 million through fraudulent means.
Details of the Scheme
The indictment outlines that on April 15, 2025, the defendants sold millions of shares to co-conspirators at a discounted rate. Following this, they artificially inflated the price and trading volume of the stock before selling the shares at a higher price, resulting in significant profits for themselves.
However, their scheme ultimately backfired, causing OST to lose a substantial $950 million in market valuation on June 26th, representing a 94% decrease in its value.
Response from U.S. Attorney Erik S. Siebert
U.S. Attorney Erik S. Siebert for the Eastern District of Virginia emphasized the importance of protecting the integrity of financial markets. He stated, “Anyone who picks the pockets of American investors in violation of the law will be aggressively prosecuted.”
Siebert also highlighted the DOJ’s whistleblower programs, encouraging individuals to report misconduct and criminal behavior to avoid serious consequences.
Legal Consequences
Sen and Zhao are facing charges of wire fraud, securities fraud, and conspiracy to commit both offenses. If convicted, they could potentially face decades in prison for their actions.