In a significant development on Thursday, the U.S. Securities and Exchange Commission (SEC) levied charges against Shanchun Huang, the Chief Executive Officer (CEO) of Future FinTech Group, alleging fraud and disclosure failures. The charges stem from Huang’s purported manipulative trading in the financial services firm’s stock before assuming the role of CEO.
Following the SEC’s announcement, Future FinTech Group witnessed a sharp decline in its stock value, with shares plummeting by 20% to hover near $1 in after-hours trading on Thursday. This downturn marked a significant setback for the company, as its stock had closed at $1.29 on Thursday and opened Friday’s trading at $1.08.
At the time of this publication, Future Fintech Group Inc stock (FTFT) has witnessed a decline.
Future Fintech Group Inc
Current Price: $0.99
Change : -0.30
Change (%): (-23.26%)
Volume: 317.8K
Source: Tomorrow Events Market Data
In a statement, the SEC revealed that Huang utilized an offshore account to trade Future FinTech shares shortly before taking on the CEO position in 2020. The regulatory body also charged Huang with failing to disclose his beneficial ownership of Future FinTech stock, along with transactions involving the stock.
According to the SEC’s findings, Huang initiated trading in Future FinTech Group’s stock in January 2020, following an approach to lead the firm. The SEC alleges that Huang’s trades, constituting a substantial percentage of daily trading volume, involved multiple buy orders and other activities aimed at artificially boosting prices.
Notably, these trades occurred during a critical period for Future FinTech, as the company faced the looming threat of delisting from the Nasdaq. Regulators highlighted that the share price had fallen below the exchange’s minimum bid price requirement of $1 a share, further emphasizing the severity of Huang’s alleged manipulative actions.
A lawyer representing Huang did not provide an immediate response to requests for comment on the SEC charges. The unfolding legal proceedings are expected to shed light on the specifics of the alleged fraudulent activities and whether they played a role in the precarious financial position of Future FinTech Group.
The SEC’s enforcement actions underscore the regulator’s commitment to maintaining fair and transparent financial markets. The charges against Huang also raise questions about the oversight and internal controls within Future FinTech, as market participants await further developments in this high-profile case.
Investors and industry observers will closely monitor the impact of the SEC charges on Future FinTech Group’s future, as the company grapples with the aftermath of the stock value decline and the potential consequences of the legal proceedings against its CEO.
