A number of purported investment advisory firms are facing charges from the U.S. Securities and Exchange Commission (SEC), and a Hong Kong-based businessman is facing criminal charges for allegedly making false filings with the SEC for firms that were used in an alleged “ramp-and-dump” scheme.
A federal grand jury in the District of Columbia returned an indictment that charges Guanhua Su, aka Michael Su, alleging that he was involved with creating at least 10 shell companies between Feb. 2023 and March 2025. The indictment also alleges that Su, managing director of a Hong Kong-based financial firm Rhino Consulting Business Service Ltd., made false regulatory filings in the U.S. on behalf of those firms to create the impression that they were legitimate advisory firms.
At least a couple of those firms — Bluesky Eagle Capital Management Ltd. and Wisdom Capital Management Group Ltd. — then allegedly induced retail investors to buy Nasdaq-listed stocks of foreign companies, using social media and WhatsApp chats to entice investors by promising high, risk-free returns. After the stocks were touted by the purported advisory firms to retail investors, their stock prices plunged, which allegedly caused “hundreds of millions” in losses for investors.
In one case, after investors were enticed to buy a company’s stock on WhatsApp, foreign brokerage firms then sold their holdings, generating US$211 million in proceeds, before the company’s stock price collapsed, dropping 88% and leaving investors with hefty losses.
Su is charged with conspiracy to commit securities fraud, making false statements and making material misstatements in regulatory filings with the SEC.
“Today’s indictment charges the defendant for his alleged role in a complex securities fraud scheme that caused hundreds of millions of dollars in investor losses,” said Matthew Galeotti, acting assistant attorney general of the U.S. Department of Justice’s (DoJ) criminal division, in a release.
Alongside the indictment against Su, the SEC has also filed civil cases against a number of the purported advisory firms, including Bluesky Eagle and Wisdom Capital, as well as Supreme Power Capital Management Ltd., AI Financial Education Foundation Ltd., AI Investment Education Foundation Ltd., Invesco Alpha Inc. and Adamant Stone Ltd.
For instance, in the case against Bluesky, the SEC alleged that the firm made material misrepresentations in its regulatory filings, including claims about its organization, office location, assets under management, and clients. The SEC said that it found no evidence that the firm managed a private investment fund with US$10 million in AUM, as it claimed in its regulatory filings.
None the allegations have bene proven, and Su is presumed to be innocent of the criminal charges.