Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, July 11, 2007

SEC Files Emergency Action Against Investment Scam

The SEC filed an emergency action on May 22, 2007, against  two Californians and their company to halt an  ongoing  fraudulent  scheme operated in Orange County, Calif., in which the defendants  raised  at least $3.7 million from approximately 33 investors.  The court entered a temporary restraining order freezing the assets of TG Capital, LLC, a  Nevada  limited  liability  company, Thanh Viet Jeremy Cao, age 26, of Orange County, Calif. and Las Vegas, Nev., and Lodavina Grosnickle, age 51,  of  Chula  Vista,  Calif.  The complaint alleges that from February 2007 to the present, Cao and Grosnickle lured investors to invest in TG Capital by  falsely promising rates of return between 28% and 30% on their investment  and assuring investors that  TG  Capital's  investments  were  secured  by guarantees from major banks or  gold.  The complaint also alleges that Cao forged at least one  bank guarantee to support his false claims.  The  complaint  further  alleges  that  Cao  and  Grosnickle  recently transferred $1.78 million of investor funds to a bank  in  Hong  Kong, purportedly to make a personal loan from Cao  to  an  individual.  The Commission alleges that defendants falsely  represented  the  overseas transfer was a legitimate TG Capital  investment  when  in  fact,  Cao personally loaned the money, leaving  TG  Capital  investors  with  no recourse if the individual borrower defaults.

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