Securities Law Prof Blog

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

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Monday, July 16, 2007

SEC Obtains TRO Against Alleged Ponzi Scheme

The SEC, on July 12, filed an emergency action to halt an ongoing $45 million securities offering that the SEC alleges to be a Ponzi-like scheme. Named in the Commission's complaint are Terchi Liao (a.k.a. Nelson Liao), of Arcadia, California, and two entities he controls, also of Arcadia, AOB Commerce, Inc. and AOB Asia Fund I, LLC. The Commission's complaint alleges that since mid-2004, the defendants have raised more than $45 million from hundreds of investors nationwide through their unregistered offering and sale of promissory notes that purportedly pay guaranteed interest of up to 5.5% per month.  The complaint also names four other Southern California entities controlled by Liao as relief defendants based on their receipt of investor funds. A United States District Judge for the Central District of California issued a temporary restraining order halting the securities offering, appointing a temporary receiver over AOB Commerce and AOB Asia Fund, and the relief defendants. The court also temporarily froze the assets of the defendants and the relief defendants.

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