1. SEC Charges Eight Individuals and Three Companies in $33 Million International Microcap Fraud; Release No. 2011-33; February 1, 2011
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SEC Charges Eight Individuals and Three Companies in
$33 Million International Microcap Fraud
FOR IMMEDIATE RELEASE
2011-33
Washington, D.C., Feb. 1, 2011 — The Securities and Exchange Commission
today filed fraud charges against the operators of a $33 million international
microcap stock scheme involving the stocks of eight small U.S. companies
headquartered in the People's Republic of China, Canada, and Israel.
Additional Materials
SEC Complaint
Litigation Release No. 21833
In a complaint filed in U.S. District Court for the Eastern District of
Michigan, the SEC charged three companies and eight individuals with
engaging in unlawful spam e-mail campaigns to pump and dump securities
of microcap companies. The SEC alleges that each scheme was primarily
organized and devised by one or all of the following:
Francis A. Tribble, who is a U.S. citizen and former stock promoter
How Wai Hui (a.k.a. John Hui), who is a dual citizen of Hong Kong
and Canada and the former CEO of China World Trade Corp.
Kwong-Chung Chan (a.k.a. Bernard Chan), who is a citizen and
resident of Hong Kong and the former CFO of China World Trade
Corp.
Gregg M.S. Berger, who is a stockbroker from Yonkers, N.Y.
In a parallel criminal proceeding, the U.S. Department of Justice today
unsealed an indictment against Berger, charging him with one count of
conspiracy to commit securities fraud and wire fraud. Previously, in related
criminal actions, Hui and Tribble pleaded guilty to conspiracy to commit
wire fraud, mail fraud and to violate the CAN-SPAM Act, as well as to
committing wire fraud and engaging in money laundering for their roles in
the scheme to artificially inflate the prices of the securities of several
companies, including China World Trade. Hui and Tribble each were
sentenced to 51 months in prison for their actions.
"Foreign companies and perpetrators with global connections are
increasingly using digital communications and other means in furtherance of
their securities fraud schemes in U.S. markets," said Robert Khuzami,
Director of the SEC's Division of Enforcement. "But as reflected in today's
enforcement actions, U.S. and international law enforcement authorities are
joining forces to effectively detect, disrupt and prosecute these frauds.
Combating microcap fraud and pump-and-dump schemes, irrespective of
where they originate, continues to be a top enforcement priority for the
SEC."
The SEC also charged the following corporate insiders for their participation
in the pump-and-dump schemes and for engaging in a fraudulent scheme
to conceal the sales of millions of shares of their companies' securities:
http://www.sec.gov/news/press/2011/2011-33.htm[28-12-2011 20:10:47]

2. SEC Charges Eight Individuals and Three Companies in $33 Million International Microcap Fraud; Release No. 2011-33; February 1, 2011
Xiaoqing Du (a.k.a. Angela Du), who is a dual citizen of Canada and
China and CEO and director of Global Peopleline Telecom Inc.
Chi Shing Ng (a.k.a. Daniel Ng), who is a citizen and resident of Hong
Kong and CEO and director of China Digital Media Corp.
Shay Ben-Asulin, who is a citizen and resident of Israel and former
Chairman of m-Wise Inc.
Mordechai Broudo, an Italian citizen and resident of Israel and former
CEO of m-Wise.
The three companies charged are China Digital, Global Peopleline, and m-
Wise.
The SEC alleges that at various times between January 2005 and December
2007, each of the defendants engaged in one or more schemes to pump up
the price and volume of the securities of one or more of the companies by
paying for false spam e-mail campaigns.
According to the SEC's complaint, the false spam e-mails lured investors
into the market and drove up demand in the stocks by, among other things,
touting non-existent IPOs and acquisitions, presenting an unrealistic picture
of the companies' business prospects, providing baseless share price
projections, or including false disclaimers. The defendants then dumped
millions of shares of these securities into the hyped market through
nominee brokerage accounts they opened with Berger, reaping millions of
dollars in profits. All eight companies' stocks were dually quoted on the
Over-the-Counter Bulletin Board and Pink Sheets.
The SEC's complaint alleges that Tribble masterminded the pump-and-dump
schemes with respect to five of the companies, and arranged for the spam
e-mail campaigns for two other companies. Berger, a long-time friend of
Tribble, played a central role in the schemes by arranging for the pump and
dump of m-Wise and facilitating the sales of millions of shares in all eight
companies through nominee brokerage accounts. John Hui and Bernard
Chan also played key roles in the fraudulent schemes by finding U.S. public
shell companies to use in bringing private Chinese companies public through
reverse mergers. They arranged for the deposit and sale of stock through
nominee brokerage accounts, and coordinated the transfer of the unlawful
trading proceeds to pay for the spam e-mail campaigns among other things.
The SEC seeks permanent injunctions, disgorgement and financial penalties
against Berger and Chan for violations of the antifraud and registration
provisions, and against Angela Du and Global Peopleline for violations of the
antifraud, registration, and reporting provisions of the federal securities
laws. The Commission also seeks an officer and director bar against Du,
and penny stock bars against Berger, Chan, and Du.
Without admitting or denying the SEC's allegations, Tribble, John Hui,
Daniel Ng, Ben-Asulin, Broudo, m-Wise, and China Digital have agreed to
settle the charges against them. The settlements are pending final approval
by the court.
Tribble agreed to a final judgment permanently enjoining him from
violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933
and Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder. Tribble also agreed to pay disgorgement of
$2,549,520 and prejudgment interest of $349,208. Tribble consented
to be barred from participating in an offering of any penny stock.
John Hui agreed to a final judgment permanently enjoining him from
violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections
10(b) and 16(a) of the Exchange Act and Rules 10b-5, 13a-14, 16a-
2, and 16a-3 thereunder, and from aiding and abetting violations of
Sections 13(a) of the Exchange Act and Rules 12b-20 and 13a-1
http://www.sec.gov/news/press/2011/2011-33.htm[28-12-2011 20:10:47]

3. SEC Charges Eight Individuals and Three Companies in $33 Million International Microcap Fraud; Release No. 2011-33; February 1, 2011
thereunder. Hui agreed to pay disgorgement of $681,117 and
prejudgment interest of $162,717. Hui also agreed to be barred from
acting as an officer or director of a public reporting company and
from participating in an offering of any penny stock.
Daniel Ng agreed to a final judgment permanently enjoining him from
violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections
10(b) and 16(a) of the Exchange Act and Rules 10b-5, 13a-14, 16a-
2, and 16a-3 thereunder, and from aiding and abetting violations of
Sections 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and
13a-11 thereunder. Ng also consented to be barred from acting as an
officer or director of a public reporting company and from
participating in an offering of any penny stock. China Digital agreed to
a permanent injunction from violations of Sections 5(a), 5(c), and
17(a) of the Securities Act, and Sections 10(b) and 13(a) of the
Exchange Act and Rules 10b-5 and 13a-1 thereunder. China Digital
also agreed to pay disgorgement of $200,000.
Ben-Asulin and Broudo agreed to a final judgment permanently
enjoining them from violating Sections 5(a), 5(c), and 17(a) of the
Securities Act, Sections 10(b) and 16(a) of the Exchange Act and
Rules 10b-5, 13a-14, 16a-2, and 16a-3 thereunder, and from aiding
and abetting violations of Sections 13(a) of the Exchange Act and
Rules 12b-20 and 13a-1 thereunder. Ben-Asulin and Broudo agreed
to be barred from acting as officers or directors of a public reporting
company and from participating in an offering of any penny stock. m-
Wise agreed to a permanent injunction from further violations of
Sections 5(a), 5(c), and 17(a) of the Securities Act, and Sections
10(b) and 16(a) of the Exchange Act and Rules 10b-5 and 13a-1
thereunder. m-Wise, Ben-Asulin, and Broudo agreed to pay, jointly
and severally, disgorgement of $400,000.
The SEC's case was investigated by senior counsel Jennifer L. Crawford and
senior accountant Daniel L. Koster.
The SEC acknowledges and appreciates the assistance of the U.S.
Attorney's Office for the Eastern District of Michigan, the Department of
Justice, Computer Crime and Intellectual Property Section, the Hong Kong
Securities and Futures Commission, and the Cyprus Securities and Exchange
Commission.
The SEC's investigation is continuing.
# # #
For more information about this enforcement action, contact:
Daniel M. Hawke, Regional Director
Elaine C. Greenberg, Associate Regional Director
Mary P. Hansen, Assistant Regional Director
SEC Philadelphia Regional Office
(215) 597-3100
http://www.sec.gov/news/press/2011/2011-33.htm
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